Wondering where to invest? Read this!

CHENNAI: If you are someone who keeps in touch with the inflation figures released by the government at regular intervals, which is currently almost touching double digits, you would probably be aghast at the trend of rising prices of almost all commodities in the market. Coupled with this is the sky-rocketing interest rates of banks that have made buying high value assets a difficult prospect.However, the question now cropping up in the minds of many who possess some amount of disposable income in their hands is where to invest so that they get a percentage of return that is higher than the current rate of inflation.According to Vivek Karwa, investment strategist and Chairman of Vridhi, investors could be divided into three categories: Those who are conservative and look for minimum risk, those seeking a higher return but still relatively cautious about the risk and those who are adventurous and look for high returns.He says that in times of inflation, the best bet for those who are looking for a risk-free investment is the fixed deposit scheme. Even though most banks provide only a return of 10 per cent for such plans, which is currently about the same as inflation rates, such deposits help investors maintain the value of their money and are extremely safe, he says.For those who are not averse to getting into slightly longer term investments, such as between three and five years, for a higher rate of return, experts say debt mutual funds, which puts your money into debt instruments such as government bonds, are an extremely viable option. V. Devanathan, a charted accountant working at one of the four big auditing companies, says that the scope for capital appreciation in debt mutual funds is high.“Because they are based on tradable instruments, the possibility of improving your capital value is high. And they also could get a fairly higher return than fixed deposits,” he says, adding that his own experience with debt mutual funds have been “extremely positive.” While it is a general notion that stock markets perform badly during inflationary trends, experts say that investing in selective stocks after taking into consideration the possible peaking of lending rates could help have a secure investment. However, they warn that it is better to take the help of an expert and talk through one’s requirements and financial stability before plunging into stocks during inflation times. Also, the traditional knowledge of investing in gold in the time of crisis holds true for high inflation as well. Says H. Raghavan, a senior officer working in the investment operations of a nationalised bank: “While some might say that gold prices could drop if global economic scenario improves, I would surely bet on gold at these times.”