Money Invest: The new financial year kicks off on April 1, making it the perfect time for savvy investors to start their financial planning. If you begin organizing your savings and investments today, you’ll maximize your benefits. So, take advantage of this April Fool’s Day to make a wise first move.

Starting your investments correctly in the new financial year is crucial. With inflation steadily eroding your savings and the global economy causing fluctuations that affect investment returns, making the right investment choices is more important than ever. If you’re looking to plan wisely, here are some helpful steps to consider.

Better investment options:

Largecaps: The Nifty 50 currently has a P/E ratio of 20.4, which is below its 5-year average of 24.79 and 10-year average of 23.49. If you’re after growth with stability, consider investing in large-cap mutual funds.

Midcaps: The Nifty Midcap 100’s P/E ratio stands at 34.5, lower than its 5-year average but higher than its 10-year average of 30.47. It’s wise to choose midcap funds that demonstrate strong earnings growth and sustainable business practices.

Smallcaps: The Nifty Smallcap 100 has a P/E ratio of 26.92, close to its 5-year average of 28.11 but significantly lower than its 10-year average of 33.11. When investing in smallcaps, proceed with caution and prioritize strong fundamentals and risk assessment.

Invest in debt options:

Retail inflation dropped to 3.61% in February 2025, the lowest in seven months. This opens the door for the RBI to potentially lower interest rates, which would benefit bond investors as rates are expected to decrease. Medium to long-term bonds and open-ended bond funds show promising potential for capital growth, making them good investment choices.

1. Medium to long-term debt mutual funds.
2. AAA-rated corporate bonds.
3. Listed bonds that qualify for long-term capital gains (LTCG) at 12.5% after holding for a year.
4. Tax-saving long-term debt fund of funds (FoFs) eligible for LTCG at 12.5% after a two-year holding period.

Gold and Multi-Asset Funds

Gold prices are soaring, making it a reliable investment choice. A gradual investment approach can help shield against short-term fluctuations while capitalizing on the asset’s long-term potential. Multi-asset funds offer a mix of investments in equities, debt, and gold, providing steady returns even when the market is shaky. With US large-cap stocks appearing pricey, it might be wise for investors to cut back on US equities and consider Indian large-caps instead.

Smart Money Management

A solid asset allocation plan is crucial for achieving long-term financial goals. Investors should tailor their portfolios based on their risk appetite, investment timeline, and potential tax benefits. For retirees, the focus should be on maximizing safety and tax efficiency. Pensioners should prioritize stable income investments that qualify for long-term capital gains (LTCG) taxed at 12.5%.

Low Risk, High Returns

Investors with a low-risk profile can explore multi-asset and hybrid funds. Non-pensioners might consider the senior citizen savings scheme, RBI bonds, and highly rated corporate bonds for tax-free income of up to Rs 12 lakh per year. The rest can be allocated to multi-asset funds, hybrid funds, and equities based on their risk tolerance. Therefore, when crafting an investment strategy, it’s essential to emphasize medium to long-term debt with some equity exposure, gold for protection, and tax-saving options.

Desclaimer: For any financial invest anywhere on your own responsibility, Times Bull will not be responsible for it.