And for a Friday as we move into the second quarter of FY 22-23, some thoughts….. some musings…..
First time in decades, 8%+ inflation in US and developed world has shaken up economies world over. In India, we have seen tougher times with 12-14% inflation. But lately it was a smooth lowering curve. All that is changing with the Covid induced monetary easing. Free doles and huge money pumped in US and Europe which also meandered into stock markets of developing economies are now drying up. Inflation, higher cost funds and scarcer capital will be the norm for some time. Fortunately, India is comparatively much better than other developing countries. We are a domestic consumption and not Export oriented Economy. Good Agricultural production with favourable monsoons and level of Digitalisation ensuring services sector growth, should make India an oasis of comparative stability and sustained growth even under these tough conditions.
These challenges warrants a re-look into savings and retirement planning for all those who are 50+ and for 60+, the odds are even harsher. Conventional Bank FDs will not suffice. Tax savings schemes to maximise post tax incomes, monetising and sweating real estate assets and at least some %age of investment into stocks is a must. Those in the late fifties and early sixties with surplus income, but not wanting to take any market risks must go in for Index based SIP like Nippon India ETF, Nifty BeES or similar very low cost Index funds. Open monthly SIPs in these schemes for next 5/10 /15 years and later when needed, convert SIPs into Monthly SWPs (Systemic Withdrawal Plans) with all investments in Either or Survivor with the spouse basis. That’s the best chance to beat market volatility and inflation. National Pension System, Assured Income Insurance Retirement plans, RBI floating rate Bonds, RBI Gold Bonds, etc. etc. are all very safe and secure long term options.
Let’s be aware of the real threats to the economy and impact on our standards of living into the future. But let’s prepare the best we can, the intelligent way, the tax-planning way, the SEEGOS way.