Coronavirus surely has created history! The scare has peaked amongst the India-origin investors worldwide when it comes to the dilemma of staying invested in equity or bond markets & watch their money grind down or not investing at this time at all, only to see inflation eat up their savings sooner than they realized. Having said that, investing in equity and market-linked investments isn’t suggested at all. It is out of question.
Here are the hard facts of the ‘investment world’ for equity and bond investments and why they will not perform for a long time. Before investing your capital next, do consider these realities & business dynamics expected to affect us all until the end of 2023.
- COVID isn’t going anywhere. It would continue to financially crush the largest (large-cap) & the toughest of the corporations of the world. Added expenses to handle: Medical compliances, operations, churning of employees/ skills & talent, productivity losses, a challenged sales force, slow deal closures, dwindled margins & profitability, hampered import & export, etc. will kill a corporate’s earnings on the whole. On the other hand, the smaller (small cap) or the emerging businesses (mid-cap) will suffocate twice as much. As a matter of bitter truth, their survival itself is questionable as we move ahead in the coming months & years. Do you really see any ray of hope for the world’s equity markets?
- Currencies of the world are eroding fast. Already, the graph today looks visually illogical when you compare the currency of a developed country versus that of developing one, where the weaker countries are looking ‘strong on currency’. The future for sure is unprecedented for the developed. A currency that looked rosy once may certainly not be the same, say 3-4 years from here. At the same time, if the developing nations recover faster in their fight with the corona-caused economic slowdown, guess what, the greatest of the currencies will falter. Industries where export and import was heavily involved or companies who survived on foreign earnings (like IT, steel & metals, oil & gas, textiles, engineering, etc.) are baffling to predict the losses they are in for, now or later. Which currency or industry could you really count on?
- The banks are in a tizzy. Bad loans, write-offs, rate switch downs on existing loans, delayed interest payments, pressure on sustaining infrastructure costs to make everything digital, etc. is restraining them to offer any good to investors in: Deposits/ Fixed Deposits, whether locally or through NRE/ NRO accounts. Further, the government is taking rapid measures to bring down the interest rates to push up consumption and drive-up economies of a country. In reality, the sector which is going to be the most non-performing, as per our estimates, is going to be ‘banking’. Investors are beginning to contemplate: Are our monies really safe with the bank?
Now on the better side, one sector unanimously across the world has come up quite positively on the performance charts. It also promises to be the ‘best bet’ in the coming future. The surprise entrant here is the ‘Insurance’ sector. In here as well, the life insurance companies are aiming for a podium finish. A strong reason in practical support of this is the fact that global world-class insurance organizations recently have entered deeper in the most advantageous geographies & world markets to offer a new category of investments altogether referred to as ‘Guaranteed Return’ investments. This category literally from just being a ‘best bet’ as we stated qualifies as a ‘confirmed bet’. At the end of the day, this is the game of investment & growth and not just poker we can bet our money on.
India as a country offers the highest potential fixed income interest rates or guaranteed lump-sum maturities backed by paper-guarantees by large insurers on such investment papers. So, if you have suffered more than frequent blows in your past equity encounters, you may immediately consider consolidating and re-evaluating your portfolio holdings. Use BigRise Financial ™ proprietary: 4-point ‘Equity Non-performance Scale’ (another article) to arrive at your next debt investment decisions, dissolving non-performing equity & market-linked products and cleaning up your equity portfolio.
Understanding the complexities ahead of the stock and bond markets, risk ratings globally remain ‘very high’ basis the above 3 factors. Not diversifying or delaying the decision to purchase & take advantage of the ‘guaranteed returns’ category today, could drive negative returns on your overall portfolio. Your capital invested could also capsize.
Indian-origin including: OCI, NRI, Indians and Expats, internationally anywhere, could explore the following features of the guaranteed insurance-backed products:
- Generally, investment starts with a minimum commitment of US $5K per year. The same equivalent can be paid in ANY currency including: Pounds, Dollars, Euros, Rupees, Dirhams/ Dinar, etc.
- Fixed income or returns are paid monthly or yearly all of which are guaranteed (written on paper)
- The rate of return is between: 4.5% to 9.5% per annum of the total invested. Option for lump-sum payout is also available.
- Percentage returns vary depending on the tenure for which an investment is held for. The higher the tenure, the higher is the percentage.
- Flexibility to choose the duration after which you need the fixed income to start coming in. You can start from the end of the 5th year onwards to delaying as much as long as 25, 30 years. Note: Tenure is to be decided after consulting the debt Financial Advisor, which is at a ZERO Fee.
- Option to start variable (non-guaranteed) interest returns as quickly as Day-1, in case the horizon of investment is smaller. These are other classified debt assets. Interest rates are typically paid in the range of 4.0% to 7.5% and paid almost daily.
- You may get an additional bonus on maturity of the duration as well which depends on the offering of the life insurer issuing the guaranteed-paper & the duration/ tenure you were invested for.
- Flexibility to choose the number of years you plan to stay invested for.
- Option to commit at the inception, the number of years for which the premiums would be contributed/ paid to the investment pool. Ease of paying ‘monthly’ is also given to smaller investments to encourage Indian-origin to do savings.
- Most importantly, ease of doing online payments to your investment as is, from any country makes this favorable. However, you have to take a debt Financial Advisor’s assistance to execute it correctly. Advisory in debt is at NO cost at all.
- Another most advantageous point is that payments for these debt investments could be done through your local bank or NRE bank accounts, in the currency of your choice. For INR payments, the NRO bank account could be used. This gives you currency exchange advantages (naturally and not by trading) and perhaps saves you 2.5 to 5% year on year. Add this to your fixed income returns and you’re much better than the rest!
- Last but not the least, you get the advantage of a FREE or adjusted price insurance coverage along with the investment paper.
Note: All the debt fixed income guaranteed products are heavily safeguarded under the regulatory umbrella.
Indian-origin people definitely have the flexibility to consult BigRise Financial ™, an Investment Consulting organization that works in the space of working with Indian-origin (PIO) across the world including: OCI, NRI & Expats to get them cutting-edge investment options in India. They bring world-class products and solutions from the world’s most renowned financial organizations and insurers to their clients.
To get COMPLIMENTARY advice on this situation, write into: nitin@bigrisefinance.com
Or Drop a WhatsApp on: +91 98182 46300
Author: Nitin Attri
BigRise Financial ™
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