Investing in g-secs; building small portfolio: Top personal finance stories

Our top stop stories this week tell you about the pros and cons of government securities and what investors must know about compounding

The Reserve Bank of India earlier offered a portal for retail investors to participate in the government securities (g-sec) market. It has now come out with a mobile app. Sanjay Kumar Singh and Karthik Jerome investigate the pros and cons of investing in g-secs and the role these sovereign-backed bonds can play in an investor’s overall portfolio.

The second article, by Sebi-registered investment advisor Deepesh Raghaw, addresses the frustration new investors feel when their portfolios don’t reflect market gains. It explains that smaller portfolios yield lower absolute returns despite high percentage gains and emphasises the importance of patience and the power of compounding. It also warns against investing too cautiously or too aggressively.

When taking a car loan, it is essential to compare the interest rates and processing fees from all major lenders before making a decision. Paisabazaar.com’s comprehensive table on new car loan rates can assist you in this comparison, ensuring you find the best deal.

If you are following the old tax regime and seeking a tax-saving investment option with high returns and a short lock-in period, equity-linked savings schemes (ELSS) are an excellent choice. This week, we present Morningstar’s review of the Mirae Asset ELSS Tax Saver Fund for your consideration.

NUMBER OF THE WEEK

828.6 tonnes: RBI’s gold holding

The Reserve Bank of India (RBI) has added 25 tonnes of gold since the beginning of 2024, taking its holding to 828.6 tonnes. This is more than the country’s average annual demand of 750-800 tonnes. The RBI’s net acquisition has exceeded last year’s count of 16.2 tonnes over the same period.

After the Russia-Ukraine war broke out, the Western powers froze Russia's dollar assets. This has made nations wary and they are trying to diversify their central bank holdings. Gold is one asset they are moving into. Heavy purchase by central banks is one reason why gold prices remain buoyant even in a rising interest rate scenario. As gold is not an interest-bearing asset, it tends to do badly in times when rates are high (as money moves into bonds).

As for retail investors, they should maintain a 10-15 per cent allocation to the yellow metal in their portfolios as a hedge against equity-market volatility.