We all have certain goals in life, and we need to save money to meet those goals. These goals can be buying a home, buying a car, a child’s education, a child’s marriage or retirement. You may have multiple goals at the same time. Making good investment decisions can help you meet these goals sooner and more efficiently. We often provide investment options for people from various sectors, and today, we will focus on doctors. Doctors have a very busy schedule, and in such a case, they may not get enough time to assess the investment options available to them in India in 2023. To help you, we have covered all the investment options you can choose to build your assets.
Before you start your investment journey, please note that it is very important to have financial discipline in life. You need to invest consistently to build assets. Never invest in just one singular asset but spread out the investment to balance the risk and return ratio. The best approach here is to mix low, medium and high-risk investments. The returns will vary depending on the bucket you choose. You can invest 50% of your income in low-risk assets, 35% in medium-risk assets and 15% in high-risk assets. Again, you can change the ratio occasionally to manage your goals and risk appetite. Let us now go over the various options available to doctors in India in 2023.
Low-Risk Investment Options
Low-risk investment options usually consist of risk-free investments like fixed deposits. There are no or negligible risks associated with these investment options, and they offer you a guaranteed return. You must always have low-risk assets in your portfolio. Most low-risk assets are highly liquid and can help you on a rainy day. As a doctor, you would understand the importance of having liquid cash or funds even when you already have medical insurance.
- Bank Deposits – The first option that you may already be aware of is the bank or the post office deposits. You can choose them in the form of fixed deposits or recurring deposits. You can compare the interest rate for multiple tenures and book a deposit accordingly.
- PPF and NPS – Another option is the public provident fund and the national pension scheme. These options offer higher returns than the typical bank deposit, but you may have a certain lock-in period here. You can check the lock-in period and exceptions available and ensure that you don’t invest your emergency funds here.
- Sovereign Gold Bonds or Physical Gold – If you like to invest in precious metals, you can also consider physical gold, gold bonds or digital gold. The gold bonds would appreciate according to the gold price and will also give you an annual return. So, these assets can be very attractive.
Medium Risk Investment Options
The next zone of investment is medium-risk investments. Here the risk is moderate, and the return can be higher than the risk-free rates. These have a beta of over one, and they move along with the market. Macroeconomic and microeconomic factors determine the returns in medium-risk assets. Check out the options below.
- Index Funds – Index funds are funds designed to mock the behaviour of the stock indexes. You can invest in index funds, too, as they offer returns in developing economies. These funds can turn negative at times of recession or slowdown, and hence the investment in index funds should be for the long term.
- Mutual Funds – Another popular option in medium risk basket is mutual funds. You can opt for medium-risk mutual funds. These are generally blue chip funds or balanced funds, considered good options to balance your portfolio. Fund managers actively manage these, so you don’t have to worry about the same.
- Real Estate – You can also plan for real estate investments if you have excessive cash. We don’t recommend purchasing real estate on loan or mortgage. Instead, you may only want to add real estate to your portfolio if you have cash to spare. The liquidity aspect of real estate can be poor.
High-Risk Investment Options
The last bucket here is the high-risk investment options. These can have a high return, but at the same time, they can have a higher loss as well. We have not added cryptocurrency and private equity to the list, but you can also choose those options.
- Derivatives – High-risk assets include derivatives. These are options and the future. The value of the derivative comes from an underlying security. For example, you will have a future for silver, oil and even securities. You can invest in derivatives, but they are very high risk.
- Hedge Funds – Hedge funds are like mutual funds, but the risk factor is high. Moreover, hedge funds are not regulated in most countries. In addition, the minimum investment amount of the hedge fund is also quite high. So, you can evaluate hedge funds if you are looking for ultra-high-risk assets.
- Mutual Funds – In the high-risk asset category, many mutual funds are available. For example, you can invest in mid-cap mutual funds or small-cap mutual funds. Since the risk is higher, the return for such funds can also be on the higher side.
- Stocks Market – The last option we cover is a direct investment in the stock market. If you are entering the stock market, ensure you have done the analysis. You must take a calculated risk and not simply invest based on emotions.
As a doctor, you may have a busy schedule and not find enough time to manage your portfolio. In such a case, it is worth automating your investments. For example, you can automate the deposits and mutual fund investments by setting up Recurring Deposit or Systematic Investment Plan. You can also set up a step-up SIP where the amount of investment increases after the period you select. All these things can make it easy for you, and then you can churn your portfolio occasionally. In addition to this, you can also hire a financial advisor or a wealth manager who can take up these tasks for you and manage your investment journey. Please note that all financial decisions should be taken at your discretion.