Thursday Brief

Although a pandemic is going on and everyone is saying that the economy is going down but still Indian stock market is booming. In just a few months Sensex rose from 50,000 to 60,000.points and people who watch the stock market closely must have made money. As per the experts, stock markets are only meant for those who are willing to take risks and can handle the volatility of the market

Now the question arises IS THE STOCK MARKET SAFE FOR SENIOR CITIZENS?

It is said that it is better for senior citizens to keep away from the stocks and equities and opt for safer options, which are Fixed Deposits of banks, pension plans, NSCs, or other such govt plans, where returns are guaranteed. A few also consider mutual fund investment as well. But equally, there are also stories about how people who have taken risks, have also managed to create more wealth. So, how safe is it for senior citizens to consider investing in stocks and equities?

Considering the inflation and other rising living expenses, the returns from safe,  investment options are certainly lesser than that in the stock market. it may be a good idea to consult a financial advisor and check out what options are available.

Before venturing into the stock market, it is always better to assess the situation and know what you have in mind and how risk-taking is possible. One must understand what it involves, and how wise investments in safe stocks and equities can help you. Another point to note, that it is never wise to put all your eggs in one basket. So, plan out retirement corpus, monthly expenses, set aside a little amount for emergencies, and then see what amount can be spared to be invested in stocks. Generally, it is advised that one must not invest more than 25% of the wealth in the stock market.

Well experienced advisors can suggest you also diversify your investments. Perhaps the amount can be split between mutual funds which are considered less risky, and the rest can be invested in safe stocks that are not likely to be highly volatile. With some help, if required, you can easily identify those ‘good performing’ companies that are stable and consistently deliver good results as well as reward their investor with good dividends. These can increase your investment and also provide you with some good leeway in money to handle some additional or unexpected expenses.

If you have an idea about how stock markets and equities function, then you can approach any bank that provides a Demat account. Bank executive will help you out with this process, who will assist and guide you and also teach you to operate this. So, if you are comfortable using technology, you can easily start operating your Demat account on your own from home.

If not, you can appoint some service providers, who will manage your corpus for you for some annual service fees. They will keep you regularly posted about your investment performance as well. In fact, there are many options to even opt for such investments that will protect you from market volatilities.

So in effect, it is worth checking out the stock markets and mutual funds to understand if you can opt for it and how to play safe even in such investments.

In the end, it is your choice, the way you want to invest your corpus and earn some extra amount, which will give you greater returns as compared to traditional investments.

Waiting, for your views on this blog.

Anil Malik

Mumbai, India

30^th September 2021

v