As we know the stock market has been butchered including domestic as well as the international market. The mutual funds are also performing very bad with constant reducing NAV.As the clues in the market remain such that immediate or bull run in short to medium term could not be expected.In such case we must focus on the alternatives present in the market , who are the best substitute for investment of our hard earned money.
1. Fixed Deposit
The first best alternative to equity market would be certainly Fixed Deposit , as the rate of return in the F.D is attractive and rising constantly.We should focus on the cause of rising interest rate:
1. If we look at the market inflation rate , which is near about 12% (appx.) ,whereby the interest rate on deposits at banks were about 8.5% to 9% , which is giving a negative revenue for us to meet or give a match to the inflation. In other words due to rising inflation our expense is rising by 12% p.a while our income on deposit is generated @9% making a deficit of 3% (appx.) .
thereby forcing the bank to offer there customer higher rate of interest to prevent premature redemptions.
2. In order to check inflation RBI under its credit policy issued from time to time is adopting measure to control liquidity in the market thereby hiking the lending rates and thus automatically the deposit rate get hiked.
2. Gold & Silver
It would be great to accumulate raw gold and silver in this festive season. The prices are going to soar in near to medium-long term.These metals are going to break there high in short term and will make new highs one after another , making it out of reach of general person and rewarding the investors generously.
These two alternative are the best amongst the various variants available in the market and would help investor to get generous return out of there investment.One can allocate there funds among the various options considering the two above as per there needs , funds , time of investment etc.