Risk Vs Reward: How to Structure Your Portfolio for Stability and Growth
Ajay considered himself financially responsible. He saved diligently, tracked expenses, and avoided reckless spending. But when it came to investing, he felt lost. “Should I chase high returns or play it safe?” The fear of market swings kept him from making a decision.
One evening, he met Mausam, a financial advisor. Over coffee, she explained, “Investing works best when different elements come together in the right proportion—just like a well-cooked meal.”
She explained, the right ingredients for a Strong Portfolio are:
- Equity – The Growth Spice: Like chili adds zing to food, equities bring high return potential. They’re volatile but reward patience.
- Debt – The Stability Rice: Corporate bonds and FDs act like rice—providing a solid base and cushioning against market fluctuations.
- Commodities – The Extra Flavour: Gold and silver along with some tactical investments enhance diversification, ensuring that the wealth isn’t tied to one asset class.
Ajay was intrigued “So, just spreading my money across different assets wisely lowers my risk?”
Mausam nodded. “Exactly! A diversified portfolio means when one asset stumbles, another holds firm—just like a well-balanced meal.”
A perfect investment plan isn’t about avoiding risk but managing it smartly. Keep reviewing and adjusting your portfolio, and soon, financial security will be your signature dish!
(Contributed by Mausam Gupta, Relationship Manager, Team Prithvi, Hum Fauji Initiatives)
Investing in India: Key implication for investors abroad
India’s booming economy presents exciting investment opportunities for global investors, including those from the US. However, investing in India comes with its own set of challenges that investors must navigate carefully.
Key Implications of Investing in the Indian Markets by a NRI
Tax Implications: US investors must report Indian investment income (dividends, capital gains) to the IRS, often requiring additional paperwork like foreign asset disclosures.
Currency Risk: Fluctuations in the Indian Rupee (INR) against the US Dollar (USD) can impact overall returns, with a weaker rupee potentially reducing profits when converted back to dollars, and of course, vice versa.
Regulatory Challenges: India’s foreign investment rules vary across sectors and regions. Frequent policy changes can create uncertainties.
Mutual Fund Transaction Data: US investors in Indian mutual funds must maintain detailed transaction records to comply with both Indian and US tax regulations.
Offline Documentation: Offline paperwork, such as KYC verification and physical copies of identification, can make the investment process more complex.
OWAS (One World Advisory Services) by Hum Fauji Initiatives – A Smarter Way to Invest
To simplify the process, we offer OWAS portfolios tailored for investors staying abroad who want to invest in the US markets as also the rest of the world without the burden of physical documentation. Whether you’re an NRI investing in India or looking to explore the US stock markets, OWAS simplifies global investments while ensuring tax efficiency.
We help you invest seamlessly while managing risks efficiently, whether you prefer an aggressive, conservative, or balanced approach, and irrespective of which country in the world do you wish to take exposure to.
(Contributed by Anjali Tomar, Relationship Manager, Team Arjun, Hum Fauji Initiatives)
China’s Markets Rebound: What It Means for India’s Investment Appeal
As China’s economy shows signs of recovery, investors are reassessing their global strategies. However, while China works to regain lost momentum, India continues its steady rise as a preferred investment destination.
China’s Market Overview
✔ Economic Recovery: Government stimulus is stabilizing the economy after a slowdown.
✔ Regulatory Risks: Past crackdowns on key sectors have left investors cautious.
✔ Ageing Population: A declining workforce poses long-term economic challenges.
✔ Global Trade Influence: China remains a crucial player in global supply chains.
✔ Investment Sentiment: Policy unpredictability still impacts confidence.
India’s Market: A Long-Term Growth Story
✔ Strong Economic Growth: Driven by domestic demand and business-friendly reforms.
✔ Favourable Demographics: A young workforce supports long-term sustainability.
✔ Manufacturing & Digital Growth: ‘Make in India’ and the tech sector attract investors.
✔ Stable Investment Climate: India offers more policy stability and regulatory transparency.
✔ Diversification Hub: A strong alternative for global investors seeking stability.
India’s Long-Term Investment Appeal While China’s recovery may draw attention, policy risks and demographic shifts create uncertainty in the minds of the investors. In contrast, India’s strong fundamentals, stable policies, and long-term growth potential make it an attractive investment destination.
(Contributed by Riya Bhandari, Relationship Manager, Team Arjun, Hum Fauji Initiatives)
What did our clients ask us in the last 7 days?
Question – As an NRI investor, will a flat 30% TDS be deducted on the redemption of all types of mutual funds, even though tax rates on long-term and short-term capital gains are lower for equity-oriented funds? If so, can I claim the exemption limit and get a refund for the excess TDS deducted?
Our Reply – No, the TDS rate for NRIs depends on the type of mutual fund and the nature of capital gains.
- Equity-Oriented Mutual Funds:
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- Short-Term Capital Gains – If you redeem units held for less than 12 months, the gains are considered short-term and are taxed at 20%. Consequently, TDS is also deducted at 20%
- Long-Term Capital Gains – For units held for more than 12 months, gains exceeding ₹1.25 lakh in a financial year are taxed at 12.5%. TDS is deducted at this 12.5% rate on the gains exceeding ₹1.25 lakh.
If you do not furnish your PAN, TDS may be deducted at a higher rate, typically 20%, as per Section 206AA of the Income Tax Act.
- Debt-Oriented Mutual Funds: Regardless of tenure, the gains will be taxed at the highest tax rate.
Since TDS is deducted at applicable rates for different categories, there is no flat 30% deduction on all mutual fund redemptions. It’s essential to provide your PAN to avoid higher TDS deductions and to file an ITR if you seek a refund for any excess TDS deducted.
💡 Refund for Excess TDS? Yes, NRIs can file an Income Tax Return (ITR) in India to claim a refund if their total tax liability is lower than the TDS deducted. However, NRIs cannot avail of the basic exemption limit applicable to residents. If your country has a Double Taxation Avoidance Agreement (DTAA) with India, you may be eligible for lower tax rates by submitting a Tax Residency Certificate (TRC) of your country of residence.
(Contributed by Team Arjun, Hum Fauji Initiatives)
Need more clarity on NRI investments? Contact us today for a seamless investment experience irrespective of the country you, your relatives, friends or colleagues reside in!
