Starting on an investment journey is like planting a seedling and nurturing it over the years to see it blossom into a fruitful tree. For an NRI with a substantial amount like 1 crore, the journey can be equally rewarding and multifaceted.
1. Diversified Equities:
Treading the path of equities can be rewarding. Following the ‘Roots and Wings’ philosophy, one can allocate funds to companies with strong balance sheets, high return on equity, and top-quality management (Roots) and those exhibiting consistent revenue and profit growth (Wings).
2. Mutual Funds:
SIP in diversified mutual funds can also be a viable option. They offer the advantage of professional management and diversification, and they’re especially suitable for those who prefer a hands-off investment approach.
3. Fixed Income Securities:
A portion of the corpus can be allocated to fixed income securities like bonds and non-convertible debentures, providing stability and regular income.
4. LSG Framework:
The Liquidity – Safety – Growth (LSG) framework of Jama Wealth advises judicious allocation. Keeping in alignment with one’s risk profile, it’s imperative to balance the investment between liquid assets, safe assets, and growth-oriented assets.
Warren Buffett rightly said, “Do not put all eggs in one basket.” So, diversification across asset classes is the key to manage risks and optimize returns effectively.
5. NRE Fixed Deposit:
Considering the currency risk for NRIs, maintaining a portion in NRE fixed deposits can also be prudent, offering safety, decent returns, and liquidity.
6. Tax Considerations:
Being an NRI, one must consider the tax implications in India as well as the country of residence and choose investments that are tax-efficient in both jurisdictions.
Practical Application:
Prioritize your financial goals, consider your risk tolerance, and build a diversified portfolio across different asset classes. A judicious mix of equity, mutual funds, and fixed-income securities can potentially offer a balanced risk-return profile.
To sum up, crafting a diverse and resilient portfolio aligned with your financial goals, risk tolerance, and tax considerations can aid in optimal wealth creation. If you require a trusted advisor on this journey, consider Jama Wealth’s portfolio management services and associated SEBI Registered Investment advisory services.
