Here's why you should spend less, invest more this festive season

What’s with the festive season and discounts? It nudges you to buy brand new items which you may or may not need. We do get instant pleasure having such items, but most of these purchases lose value over time. What about buying something that appreciates in value? Yes, that’s how you should kick off this festive season. What is it whose value will appreciate over time? Investments.

Let’s focus on investments over expenses as the festivities begin this year. Just as buying stocks on Muhurat trading on Diwali day is considered a good omen, start investing for your key financial goals from your preferred festival day. In any case, one can start SIPs in mutual funds the moment one wants. So why not from auspicious days such as Navratri, Diwali or Dussehra!

Gold/silver funds

Buying some gold or silver is a ritual on Dhanteras or Diwali. One doesn’t have to buy physical gold or silver that involves extra charges, impurity, safety and storage issues. There are gold and silver mutual funds that you can consider.

Debt mutual funds
Debt instruments must find a place in every investor’s portfolio. Fixed deposits undoubtedly are part of most investors’ portfolios, but it’s time to upgrade oneself. There are target maturity funds whose maturity date aligns with the expiry date of debt papers in which they have invested. This structure makes them a safer form of investment, especially if you hold your investment till maturity.

Hybrid funds
Another investment option that deserves attention is hybrid funds. Hybrid funds invest in a combination of debt, equity and other asset classes. There are seven types of hybrid funds. Balanced advantage funds, multi-asset allocation funds and equity savings funds are the three most popular ones. The debt portion in such funds gives you safety and equities growth. You can choose a suitable hybrid fund based on your risk appetite.

Equity mutual funds
If your risk appetite allows, you may go for equity mutual funds as well. The ideal way to start equity mutual fund investment is through index funds. You may start SIPs in those anytime in the year irrespective of market valuations.

Change is the only constant. Be different; do something different this year. Pledge to invest (not spend) your money this festive season. Ask others to invest. Investments, not expenses, make you prosperous.

(Deepak Jain is the Head – Sales at Edelweiss Asset Management.)