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OLM Desk - 30 December 2022

Insulated Markets

The high-interest rate environment and market volatility have surely aroused investors’ curiosity about the future. Yet, the situation they confront offers comfort in the hope that debt instruments will come to their rescue as return expectations are becoming muted in the equity space. Markets Insulated, Multi-Assets New Flavour captured these sentiments well. Although I factored in volatility in my investments, I hadn’t quite thought about a rate-focused strategy until I came across this article. Most of my funds are for the long term. However, after reading the article, I feel inspired by the prospects opened up by the high-rate regime waiting to be explored. Instruments like floating rate and low-duration funds, besides debt and multi-asset plans, would be worth exploring. But given the market undercurrents, I might consider a floating rate fund or a multi-asset fund. I have been a regular investor over the past five years. So far, it has been a mixed journey. Hopefully, adding one or more funds, keeping in mind the rate scenario, would put me in the right stead towards my goals.

N. Chinapa, email

Stock SIPs

Learning the difference between a stock systematic investment plan (SIP) and a mutual fund SIP was fascinating. 3 Myths Around Stock SIPs helped me remove some misconceptions about them. While I love learning about the stock market in my spare time, I can now see why it may be more prudent to leave it to the experts for stock picks. For a relatively new investor like me, a mutual fund SIP might be a better option than a stock SIP from the risk-management perspective. I was planning to buy one after a friend nudged me to do so. While the idea might be good, given the many positives with stock SIPs, there are downsides, too, as highlighted in the article. Cherrypicking the right stocks could be tough. Moreover, there  is no scope for diversification later, unlike mutual fund SIPs, for a course correction. So, I have postponed that decision. But I would like to try them one day, now that I know the pitfalls.

Zafri Hasan, email

Debt Trap

I was burdened with major debt after a medical emergency in the family a few years ago. At the time, I didn’t know about debt management providers. I had equated monthly instalments (EMIs) for my car, credit card, and home loans. Although I survived that difficult phase, I still shudder at the thought of my situation in those days, with recovery agents bugging me non-stop. Regardless of the services today, falling into a debt trap is never good. Even if a person hires a professional, they would still suffer. As pointed out in the article, Lending A Hand To Freedom, these firms could charge a hefty amount for loan settlement. There is also no guarantee that your credit score will improve. The best recourse is to avoid debt.

K.C. Dabas, email

To A Truly Happy New Year!
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