Tips for how to finalise between Debt and Equities

following tips by renowed and experienced professional will surely help you in finalising between debt and equities thus increasing your confidence in share markets amid various turmoils and uncertainities prevelant in this domain of Stock market investing.

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The stock market's troubles are far from over. The biggest concerns – inflation and high crude prices – continue to bog world economy, despite the latter now showing a downward movement.

A big challenge for the corporate sector is high input costs and, for the tech sector, the US recession. In fact, between them, these two factors are bound to affect the performance of several other sectors.

Do's and Dont's of Share Markets

In this background, short-term investors should invest in debt products as they give assured returns, in doubt-digits at that. On the other hand, if – and only if – investors are prepared to wait for at least three years, they can look at equity. But they need to invest in a staggered manner.

For instance, look at daily and weekly STPs (systematic transfer plans). Here, a lump sum gets invested in a debt fund with a fixed amount getting transferred from it to an equity or balanced fund regularly.

This will allow the investor to take advantage of market volatility by spreading his exposure. STPs are also cheaper as fund houses do not charge any entry fee for the transfer. However, STPs are applicable for investments of over Rs 50K as a smaller corpus can get invested in a matter of days.

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Investors with a long-term view can also look at accumulating stocks in sectors such as capital goods, construction, media and entertainment. In the case of construction, the investment would be 'contrarian', as the sector has been beaten down heavily in the last few months.

Aggressive investors can also look at banking and financial services as these could get a much-needed reform boost soon. But remember that these sectors are still not free from the problem of high interest rates. In the end, it’s you who will have to decide whether you have the confidence in the potential of the stock markets.