Making financial portfolio inflation proof for the working woman

Table of Content

1. Here are 4 ways in which women can make their financial portfolio inflation proof

2. Conclusion

In this policy, the investment risk in the investment portfolio is borne by the policyholder

According to the Union Budget presented in 2022, it is expected that the participation of women in the workforce in urban India will increase by 10%^*. Historically, women have deferred financial decisions to male members in the family, but that is changing now. Therefore, it becomes extremely important for women to plan their financial future.

Here are 4 ways in which women can make their financial portfolio inflation proof:

1. Invest, Save and Then Spend

   Budgeting and planning are important to plan finances and expenses for the month. Traditionally, women have been in the homemaker role and are known to be excellent finance managers. Today is no different from them when it comes to managing money. Women are quite adept at planning and saving.

   Because the dependency of women on Money is limited when it comes to household expenses, the general tendency is to spend money on wants. However, they could slightly modify their approach and focus on investing, then saving and then spending. The equation should be spending = income minus saving / investment.

2. Invest in equity linked instruments

   When it comes to investment for the long term, nothing beats equities in terms of return. The returns from the equity market also beats inflation in India. However, investing directly in the stock market can be risky and may be subject to fluctuating returns depending on the time of investments and choice of underlying stocks. Here is one such product which is linked to equity markets but does not directly get affected by the downside. Unit Linked Investment Plans (ULIP) by HDFC life such as HDFC Life Click 2 Wealth invest in instruments that are linked to the market.

3. Protect your child’s future against inflation

   It is important to ensure that your child’s future aspirations such as higher education, studying abroad or doing an expensive course is comfortably fulfilled without any additional burden on you during your retirement or on your child in the form of an education loan. One such plan to support your child’s aspirations and educational goals in the future is the HDFC Life YoungStar Udaan.

4. Diversify your portfolio

   The golden rule of investment is to never put all your eggs in one basket, especially equity markets. Although market linked instruments beat inflation in the long run, they are volatile. So diversify your portfolio. Equity market returns can be volatile, and you may live to see the downside as well. Equity investing is not suitable for weak-hearted people. Hence, a mix of equity and debt can be a good safety net for your portfolio and can reduce the downside portfolio risk substantially.

Conclusion

Working women have multiple options to invest. They should evaluate all these options carefully and take suitable decisions as per their requirements.

*(Source:https://www.business-standard.com/content/press-releases-ani/budget-2022-india-likely-to-see-a-jump-in-women-workforce-participation-in-urban-india-by-10-percent-122020200634_1.html)

ARN: ED/08/22/28517