India has a second consecutive stable government. The key question to ask is, what impact will this have on one’s personal finances?
Well, in the short term (0-3 years), the impact will be neutral as we won’t see much change in our lifestyle or financial condition. However with a stable government, markets and economic conditions are expected to be much better in medium to long term (> 3 years).
Have you considered this aspect while planning your personal finances?
If you don’t have any Personal Financial Plan in place for yourself, it’s good time to start.
If you already have a plan, it’s good time to review.
Both cases, considering the following aspects is surely worthwhile
Avoid lump-sum equity investments even if equity markets are upbeat. With all-time high for Indian equity, many of us will be tempted to start equity investments or increase equity investments. However, amidst general positive mood, let’s remember that only good quality mutual funds and stocks can offer positive output in the long term. For the first time investors, avoiding sudden lump sum investments is the key. Please consult a sound financial planner, who can realign your investment strategies to your goals. You may find some of them here.
Stock and scheme selection is the key even if general economic environment is very positive. Please remember that government policies take time impact on specific sectors. So, you may hear a lot stories on emerging sectors, please remember that selecting right schemes with a sound advisory and link to your goals is the key.
Retirement schemes watch out for good retirement and insurance schemes coming from the government. If you are retiring or have already retired, Pradhan Mantri Vaya Vandana Pension scheme (run by LIC) is available till May’20 with attractive returns. However, do watch out for further announcements before you lock your retirement corpus for long term during this period so that you get the best of advantage.
Home loans and interest rates if you are planning to buy a house, generally an upbeat economy offers advantage of lower interest rates. While currently, RBI has been maintaining a neutral stand on interest rates, with government’s thrust on fiscal discipline and inflation control, we may expect lowering of interest rates over next one year. In case you are purchasing a home, do consider floating rate schemes so that you may get benefits of lowered interest rates.
Digital payments and online transactions Be ready to face another thrust on strengthening the digital payments and online transactions. This may mean changing your current spending and saving habits. Do keep a watch on the same and make a provision suitably in your financial plan.
Overall, a stable government can give us a lot of upside on our investments and financial plan. However, only those who have a sound plan, can take maximum advantage of the same. It’s better to take a professional advice from a financial planner to make room for these changes in your financial plan. You may click here to meet some of the best financial planners to help in this matter or read more about planning your personal finances here.