In a booming stock market, it’s easy to be captivated by the high returns that equities can offer. However, focusing solely on stocks exposes investors to significant volatility and concentration risk. A prudent investment strategy embraces diversification, spreading investments across various asset classes to mitigate risk.
Diversification isn’t t just about spreading investments across different stocks; it’s about including different types of investment assets that react differently to economic events. This is where fixed income investments and bonds come into play. They offer predictable returns with a steady income stream, providing a cushion against the volatility associated with equities.
The Role of Bonds in an Investment Portfolio
Bonds or Non-Convertible Debentures (NCDs) are debt securities issued by companies to raise capital from investors. They can be of two types, Corporate bonds and Government bonds. When you invest in bonds, you essentially lend money to the issuer in exchange for periodic interest payments and the return of the principal amount on maturity.
Bonds or NCDs can be secured or unsecured. To delve deeper into these distinctions, refer to our previous blog.
Introducing Secured Real estate Bonds, an alternative form of investment in real estate providing a steady interest income stream with the security of Real Estate.
Advantages of Real Estate Bonds
Fixed Returns
These bonds provide fixed-interest over the Bond tenor. Since the returns are fixed at time of issuance, they offer predictability and stability to your portfolio unlike the unpredictable nature of stock returns.
Stable Income Stream
Real estate bonds offer regular monthly or quarterly interest payments, ensuring a steady income stream. These predetermined cashflows can act as an alternate source of income and can be used to cover your expenses or cashflow requirements in EMIs, SIPs.
High Returns
Real Estate bonds offer high returns of upto 16% p.a, compared to Fixed Deposits (FDs) and other corporate bonds of similar maturities making them an attractive investment option for those seeking higher fixed returns.
Hedging against Market Volatility
Unlike stocks which are subject to daily price fluctuations influenced by various factors, Real Estate Bonds are less volatile, acting as a reliable protection against market downturns.
Security of Real Estate
Unlike other bonds (secured by book debts, inventory, patents and trademarks, equipment and machinery etc) these bonds are secured by tangible property, whose security value is much more stable and more often appreciates over time.
Real estate bonds offer a way to diversify your investment portfolio into Real Estate without investing and facing the hassles of traditional Real Estate ownership.
Achieving financial stability and growth begins with thoughtful investment decisions. The first step starts with assessing your financial goals and risk tolerance. This helps you to decide the allocation of fixed-income securities in your portfolio. Further, careful evaluation of various factors like interest rates, credit quality, maturity dates etc helps you to select the right investments.
Invest in Secured Real Estate Bonds opportunity today on The Restack Platform.
Disclaimer:
NCDs are subject to risks. Please make your own independent assessment of the merits and the risks of the investment opportunities available on the platform or mentioned in this blog, and conduct your own diligence and consult your own advisors on the legal, business and tax matters. The Restack does not give any investment advice or recommendation in respect of the opportunities available on the platform or mentioned in this blog and accordingly, nothing on the platform or in this blog should be considered as an investment advice or recommendation. Please refer the terms and conditions for further details.
