Investment Avenues Post Covid Era

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Covid has changed the world in many ways and it has certainly hampered the sentiments of the investors the way they used to invest Pre-Covid. This can be attributed to the uncertainties in business/jobs, crisis and low interest rate regime the country has experienced. Every crisis has been different from the other and so are the learnings. The wounds are fresh in the mind of the investors, though the markets have reached their peak beating all fears and negative impact of Covid. Interest rates have bottomed out to a level never experienced by the investors and many such issues have left the investors confused as to where to invest? We are listing below some of the areas and products that can suit investors of all kinds, especially from asset allocation point of view it would be important to understand the avenues available for investment.

Debt Products

Bonds of PSUs/ Debentures

The Bonds and debentures are floated by the companies both government and private, from time to time. These are available in the secondary market and traded in the exchange at the pricing based on the interest rate scenario.


The product suits mainly institutional clients as it has fluctuation in the pricing which is linked to 10 year benchmark yield which indicates the interest rate movement in the economy. It could suit only those individuals and HNIs who can hold to maturity. The tenure is 10-20 years as the return is higher with the longer maturity papers and the exit option is available at market price or by pledging the same to take loan.


Fixed Deposits

The traditional and most popular product among retail investors which gives a fixed coupon rate with tenure ranging from 1-10 years. The schemes are being floated by NBFC and Housing Finance Companies which are regulated by RBI. The interest rate is subject to taxability and can suit retail investors only if they are in low tax slabs. 


It not only suits retail investors, HNIs but also corporates and Institutions as it has rates higher than bank FDs. The cumulative option makes it attractive as the yields make it attractive; however, regular pay outs are also possible buy opting for non-cumulative options.


Gov. Schemes- PO Schemes, RBI Bonds

The products are issued by GOI and completely safe as they have a government backing. RBI bonds have floating rate of interest which are linked to post office scheme of NSC and are adjusted on half yearly basis. Post office schemes have schemes which have coupon rate fixed for tenure like any FD scheme.


The scheme suits senior citizens and investors who are totally risk averse and can park money for long term. However, the interest rates are taxable and the tenure available is 5 years and above thus investors who want to enjoy regular returns without worrying about safety of funds can invest in the product.


PO Schemes

Mutual Funds

The Avenue which has been accepted for over 2 decades, though might be still considered as nascent as compared to the traditional products mentioned above, it is an over Rs.25 lakh crore industry. The product is well accepted not only for the variety it gives to the investors but also for the taxation benefits it gives to enhance the post-tax returns.

Equity Funds

Popular mode which certainly has pleased with its returns after the markets have peaked, however, the confusion is how to bring participation in the market at this level.  On one hand the investors have booked profits at all levels and the markets are still going strong defying the purpose of accumulation of wealth. The investors should see the quantum of profit that is being encashed as it might be a notional satisfaction for many who wouldn’t be able achieves significant purpose. Investors relate investment in stocks directly with investment in MFs which is the wrong philosophy as two has different objectives. Investing in stock could be for speculative purpose and needs good amount of research to turn it in wealth builder in long term, however, the MF investment is more about discipline which helps in accumulation of returns by outsourcing to Fund manager.


It could suit all those who have any aspiration to achieve whatever goals one may have- it could be for children education, retirement, contingency fund, buying of house and many more. The strategy could differ from person to person as per the suitability of financial plans. Timing of market is not important rather timing the start of investment is important. We have seen in past, in 2008 Lehman crisis led to over 60% crash in the market which recovered in 5 years to witness another bull run. Thus it is an important part of your portfolio allocation and participation at any level to bring accumulation of wealth in medium to long term.

Debts Funds

This Avenue is dear to everyone to keep the right asset allocation in the portfolio with the tax efficiency attached to the returns. The product has seen a dent in the sentiments post Templeton fiasco where the AMC has wound up its 6 schemes post covid crisis. However, the matter is in court and soon a resolution would bring clarity for investors as to when would the stuck up funds would be received by them. This hasn’t taken away the sheen of the product which has huge variety of schemes which has potential to give 2-3% higher post tax returns than bank FDs.


We mentioned above that it is essential to allocate portion of funds which is meant to be in safe heavens depending the way you want liquidity in the portfolio. The safe and government backed products mentioned above are not taxable but also has long maturity. Therefore, for the purpose of long capital term gain one requires to hold it for 3 years to enhance the post-tax returns, but the liquidity remains throughout.


The yellow metal has really shinned well in recent months as the uncertainty due to pandemic has moved everyone to safe heavens. The asset which certainly is important to be part of the portfolio to give security everyone needs to build in the system. However, the percentage of allocation and the form it should be held could differ from individual to individual. Therefore, it is important to take decision of investing in any commodity in the form which suits your temperament.


It suits every household not only for purpose of investment but also for making use at the time of marriage of children. However, it is viable to make investment in paper form rather than physical. The choices one has to invest in paper form. The government issues Sovereign Gold Bonds which gives 2.5% pa interest rate and capital gain tax exemption if held over 5 years, MFs and ETFs.