5 low-risk investment options in current times which will make you rich

how to become rich, how to become rich in india, low risk investment options, top investment opportunities 2019, 5 good investment options in present times, equity, PPF, real estate, FD, gold

For investors the focus in 2019 should be on risk minimization and capital preservation in the pursuit of wealth creation because the markets are expected to be extremely volatile during the first half of the year in the run up to the general elections. The equity markets would have a clear direction only after the results of general elections are announced. If the Modi government is able to get a second term, the markets are expected to rally. However, if the possibility of a coalition government emerges, the markets can see a huge sell off. In this environment, therefore, it is advisable to be equity light, especially in the first half of the year.

An ideal portfolio for 2019 should have a higher fixed income component, while the equity exposure should contain large cap stocks along with diversified mutual funds. Some capital can, however, be assigned to select quality midcap stocks that have taken significant beating in 2018. An example of a possible asset allocation that is focused on safety is presented in the table below.

Under the volatile market conditions, one should have a significant exposure to fixed income securities for capital preservation. Fixed income exposure can either be gained through debt mutual funds or through extremely safe bank FDs or high-rated corporate debt instruments.


Equity investment has the potential to grow one’s wealth multi-fold in the long term, but it also comes with high risks associated with it. The benchmark index Sensex has delivered around 14 per cent annual return over the last 10 years. As 2019 can be a volatile year for the equity market, it is advisable to allocate some part of your investment in equity as per your risk appetite. In 2019, the best way to invest in equities is through a systematic manner in quality stocks or mutual funds. One can invest directly in equity or the through mutual funds route. Elections are around the corner and we might see the market go either side on the poll outcome. Investors should, therefore, be patient with their equity investments. They are also advised to invest systematically and to not reduce their equity exposure from the planned asset allocation for 2019 if there is an adverse outcome in the general elections as the pull back would be temporary.

Debt Instruments

Government bonds, corporate bonds, short-term money market instruments, debt mutual funds are a few options that can be used by investors to gain exposure to debt as a part of their portfolio. Significant exposure to debt in 2019 will provide a cushion against equity investment volatility. Broadly, it is expected that there will be chances of one or more rate cuts by the RBI in 2019 and reduction in interest rate will benefit the debt holders as their bond prices will increase with decreasing interest. One can directly invest in debt instrument by buying bonds outright or through debt funds, but it is advisable to invest in top-rated debt instrument and allocate into both short-term and long-term debts.

Public Provident Fund (PPF)

PPF is the most preferred investment avenues for a majority of common people who are risk-averse as it offers a decent return coupled with income tax benefits under Section 80C of the Income Tax Act. PPF comes under the exempt, exempt, exempt (EEE) category of tax status. This means that returns, maturity amount and interest income are exempt from income tax. Since the PPF has a long tenure of 15 years, the main benefit is that it gives a fixed return and helps to build a long term investment corpus for retirement. Additionally, a PPF account can be extended for next 5 years after the completion of its tenure. It is considered as the safest and secure long-term investment product when compared to other investment options in India. Minimum investment required in case of PPF is Rs 500 per month and the maximum is Rs 1,50,000 in one financial year. A PPF account can be opened with a bank or post office. Currently the rate of interest on PPF accounts is 8 per cent for the January-March 2019 quarter (Q4 FY19) and interest rates are now set on a quarterly basis (every three months).

Fixed deposits (FDs) & Recurring deposits (RDs)

Investors with a lump sum amount and extremely low-risk appetite can invest in fixed deposits (FDs) as these are secure investment instruments that offer higher interest rates than deposits in savings accounts. The returns of FDs are fixed across predetermined, specific periods of time. FDs are offered by commercial banks, small finance banks, non-banking financial companies (NBFCs) and post offices. The tenure of investment in FDs can start with 7 days and can be spread over as long as 10 years. The rate of interest can vary from 3.5 per cent to as high as 8 per cent and more per annum, depending upon the period of investment and the type of banks. Investors can get the benefit of compounding interest that will help to create wealth in the long term.

In contrast to lump sum investments in FDs, a recurring deposit (RD) is a kind of term deposit under which one needs to deposit a fixed amount at fixed intervals. Investors can deposit the sum every month and earn an interest income on the same. The interest rate varies from banks to banks, and for post office RD.

Gold & Real Estate

Gold is one of the oldest investment asset classes and is considered as a safe haven against uncertainties and market turmoil. Although gold has delivered poor returns in the last few years, investment in gold can benefit in a longer period of time as it hedges against any down trend in other assets like equity and real assets in a recessionary trend. Investment in gold can either be done by buying physical gold or through gold mutual funds, gold deposit schemes or through gold ETFs. Since buying physical gold consists of carrying cost and also is risky to store, it is advisable to buy gold through exchanges in the DMAT form.

Both gold and real estate investments add the desired diversification to an investment portfolio and, therefore, are always advisable. If one is looking for buying their first home, 2019 would be a good year to make that personal investment. If the purchase of property is for making investment, one should focus on low-cost ready-to-move-in investment properties. With the government’s push on Housing for All by 2022, and on affordable housing, we expect this segment of the real estate market to do really well.

To sum up, 2019 is expected to be a volatile year. Therefore, investors should focus more on capital preservation and risk minimization with their investments. In turbulent times, capital preservation is an important aspect of wealth creation. Investors are, therefore, advised to stay equity light at least in the first half of the year and increase their allocation to debt and other asset classes such as gold and real estate.




Author: Roky