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POSTED BY ON November 9, 2013 3:02 pm COMMENTS (8)
I need to invest an amount X. Term of investment is 20 years. I will not need the money before 20 years. This is a classic case of investing in stocks/equity-mutual-funds. HOWEVER, I am investing on behalf of somebody and that somebody is absolutely clear that he does not want the money to be handled by “private” entities. It must be LIC/RBI or some such thing.
Given that restriction, I need suggestions. What is the best investment possible? Are there RBI bonds available for retail investors?
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Dear Sambaran, as the age is 70+, no LIC product is there for him. So better to stick with FDs in SBI, the simplest product for his age.
Thanks
Ashal
Can you make a guess why the ‘somebody’ is absolutely sure that NO PRIVATE entity should handle the investment?
I can make a guess that (s)he is concerned about the protection of the capital.
But for me, Quantum AMC (private) offers better products than LIC (public).
Yes. He is concerned about protection of capital. He is 70+ years old and too tired to change his opinions. I am sure Ajit Dayal himself will approve of this mentality.
I completely agree with you regarding the Quantum AMC part. I keep my money there. However, this is somebody else’s money and I must honor his wish. I am eagerly looking out for the RBI CPI-indexed-bonds. Manish, it will be of great value to people if you review that product once it comes out.
I just re-read your ‘public’ ‘private’ words.
Not sure why there is such restriction.
In that case Tax free bonds are still from Govt backed companies. So shouldn’t be a problem for somebody.
For Balanced fund and Equity fund – go for SBI Balanced fund and SBI Bluechip funds respectively.
what risk that ‘somebody’ is ready to take?
Low – Buy tax free bonds that are going to open in next two months
Medium – Balanced fund (ICICI Equity volatility advantage fund)
High – Equity mutual fund (Quantum Long term equity fund)
Thanks Karthik for your responses.
The risk appetite is ZERO. ‘Somebody’ knows the word inflation but does not understand it, nor will ever understand it.
As you said, the tax free bonds might be the avenue I am looking for. Any idea about the upcoming CPI (consumer price inflation) indexed RBI bonds that every media is talking about?
can’t comment on the inflation adjusted bonds or deposits unless they are released.
One thing to notice in Tax Free bonds is that, the interest is paid out every year. So, you will have to invest it somewhere to see the money growing.