Last Updated:November 07, 2024, 16:00 IST

Check alternative investment options to help retail investors earn comfortable returns even when stock markets are volatile.

Market downturns are an opportunity to reassess and realign financial strategies.

When the stock markets tumble, it can leave retail investors feeling anxious and uncertain about their portfolios. However, market downturns are also an opportunity to reassess and realign financial strategies. Here are alternative investment options to help retail investors earn comfortable returns even when stock markets are volatile.

1. Fixed Deposits (FDs) for Safety

Why Consider? Fixed deposits offer guaranteed returns and are unaffected by stock market fluctuations, making them ideal during market downturns.

Current Scenario: With rising interest rates in India, banks and financial institutions are offering better FD rates, sometimes reaching up to 8% per annum.

Ideal for: Conservative investors or those nearing retirement who prioritise capital preservation.

2. Debt Mutual Funds for Steady Returns

Why Consider? Debt mutual funds invest in bonds, government securities, and corporate debt, providing a balance of safety and returns.

Risk Profile: While not completely risk-free, debt funds generally experience lower volatility than equities.

Options: Liquid funds and short-term bond funds are recommended for investors looking for returns without long-term lock-in periods. Yields typically range from 5% to 7%, depending on market conditions.

3. Government-backed Small Savings Schemes

Why Consider? Schemes like the Public Provident Fund (PPF) and National Savings Certificates (NSC) offer attractive, tax-free returns.

Returns: PPF, for instance, offers an interest rate of around 7.1%, with a 15-year lock-in period but tax-free maturity benefits.

Other Options: Consider the Senior Citizens Savings Scheme (SCSS) if you’re a senior, with returns of up to 8%.

4. Real Estate Investment Opportunities

Why Consider? Property prices in some regions have stabilised, creating favorable conditions for long-term investments in real estate. Rental yields provide a steady income stream.

Alternative Option: Real Estate Investment Trusts (REITs) offer a more liquid, lower-investment entry into real estate, with yields averaging around 6%-8%.

5. Gold Investments as a Hedge Against Market Volatility

Why Consider? Gold has historically been a safe haven during economic downturns and a hedge against inflation.

Options: Gold ETFs and sovereign gold bonds (SGBs) allow you to invest in gold without physically holding it, while offering returns linked to gold prices.

Returns Potential: Gold has averaged 8%-10% returns over the past decade, though actual performance varies with market conditions.

6. Dividend Stocks for Income Stability

Why Consider? Dividend-paying stocks are less volatile than growth stocks and provide income even during bear markets.

Selection Tip: Look for large-cap companies with a history of consistent dividends. Sectors like utilities, consumer goods, and pharmaceuticals tend to have reliable dividend payers.

7. Systematic Investment Plans (SIPs) in Mutual Funds

Why Consider? SIPs in equity mutual funds allow you to invest a fixed amount regularly, spreading out risk and taking advantage of market dips to acquire units at lower prices.

Market Volatility Advantage: With SIPs, investors benefit from rupee cost averaging, which mitigates the impact of market fluctuations.

8. Corporate Bonds for Fixed Income

Why Consider? Corporate bonds, particularly AAA-rated ones, offer fixed interest rates and are relatively safe, especially when issued by financially sound companies.

Current Yields: Corporate bonds can yield anywhere from 7% to 9%, depending on the issuer and bond duration.

Risk Profile: Check the bond ratings to ensure the issuer’s creditworthiness and be mindful of lock-in periods.

9. Hybrid Mutual Funds for a Balanced Approach

Why Consider? Hybrid funds allocate assets to both equity and debt, providing growth potential along with capital protection.

Ideal Choice: Balanced Advantage Funds (BAFs) adjust their equity and debt allocations based on market conditions, which can be advantageous during uncertain times.

10. Alternative Investments: Peer-to-Peer Lending

Why Consider? Peer-to-peer (P2P) lending platforms connect lenders with borrowers, offering a potential for high returns with calculated risk.

Potential Returns: Returns in P2P lending can range from 10% to 15%, but investors should conduct thorough research before committing.

While the stock market may be experiencing turbulence, retail investors have various options to diversify and earn comfortable returns. A balanced approach, combining safe-haven investments like FDs or government-backed schemes with moderate-risk options like debt funds and corporate bonds, can safeguard your portfolio.

Disclaimer: Users are advised to check with certified experts before taking any investment decisions.

Gold vs Silver buying: Silver presents an attractive option for aggressive investors seeking portfolio diversification and alpha generation beyond traditional equities, believe analysts. Despite the recent surge in domestic prices, which saw silver reach the Rs 1 lakh per kg mark, analysts suggest that investors consider allocating 3-5% of their portfolio to the white metal by buying on dips over the next 1-3 months.
Since the beginning of the calendar year 2024, silver has experienced impressive gains, rising by 33.65% to touch the Rs 1 lakh per kg mark.In the past month alone, it has gained 12.5%, outperforming the Nifty 50 index, which returned 12.5% during the calendar year but lost 5.6% over the past month.
In dollar terms, silver’s performance has been even more remarkable, with gains of 47.25% and 13.56%, respectively, over the same periods.
Vishnu Kant Upadhyay, AVP-Research and Advisory at Master Capital Services, attributes the increasing market value of silver to its extensive use in various industries.

“Silver is extensively utilised in electronics, solar panels, batteries, and increasingly in semiconductors, making it a critical component in modern technology. The growing industrial demand for silver along with the anticipation of another rate cut by the Federal Reserve is causing an increase in the metal’s market value,” he told ET.
Also Read | Silver better than gold for investment? Silver prices cross Rs 1 lakh mark!
Manav Modi, a bullion analyst at Motilal Oswal Financial Services, highlights the factors supporting silver prices, including “Rising industrial demand, high domestic imports, ETF buying by investors and Fed rate cuts have been supportive for silver.”
While acknowledging the possibility of profit-booking following the sharp rally, Modi advises investors to view major dips as buying opportunities. He projects that silver could reach Rs 1.25 lakh per kg over the next 12 months.
As advancements in technology continue and the need for electronic devices and semiconductors grows, the demand for silver is expected to remain strong, leading to a sustained upward trend in prices.
Bhavesh Jain, co-head of Hybrid and Solutions Funds at Edelweiss Asset Management, stated, “Silver has seen a strong long-term bullish break; the trend could likely continue supported by lower rates for longer and the revival in Chinese industrial activity.” Jain suggests that investing in silver ETFs is a more convenient option for investors compared to purchasing physical silver.
Also Read | Looking to beat fixed deposit returns? Here’s what investors can consider instead of FD
However, some fund managers believe that the long-term prospects of silver will be influenced by the adoption and adherence to climate change and green technology initiatives by major global economies.
Vikram Dhawan, head of commodities and fund manager at Nippon India Mutual Fund, explained, “If investors believe in Earth’s rising temperature problem and its consequences, silver can serve as a proxy hedge.”
Nirav Karkera, head of research at Fisdom, advises, “Aggressive investors could buy on every fall and allocate 5-15% of their portfolio to the white metal.”
Dhawan pointed out that in the short term, silver prices may be affected by a Republican victory in the US, as Donald Trump is not known for his environmentalist stance and instead favors fossil fuels.
Considering the anticipated volatility, the upcoming US elections, and uncertainty regarding further rate cuts by the Federal Reserve, wealth managers recommend that investors consider staggering their silver purchases.

Gold prices in Pakistan saw a sharp decline on Tuesday, as global markets experienced a dip in precious metal rates.

In the local bullion market, the price of gold fell by Rs1,000 per tola, bringing it to Rs274,700, according to figures released by the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA).

Similarly, the price of 10-gram gold dropped by Rs857, now standing at Rs235,511. This decrease comes after a marginal increase of Rs200 per tola on Monday, when gold settled at Rs275,700 per tola.

Globally, gold prices also faced a decline, with rates falling by $9 during the day. According to the APGJSA, the international gold price stood at $2,647 per ounce, including a $20 premium.

Despite the drop in gold prices, the silver market remained stable, with the price of silver holding at Rs3,050 per tola.

Last month, gold prices in Pakistan had surged to a record high of Rs277,000 per tola, as the precious metal saw significant gains due to international market fluctuations.

Gold prices in Pakistan declined on Saturday in line with their decrease in international rates. In the local market, the price of gold per tola was lessened by Rs700, clocking in at Rs276,000.

Similarly, 10-gram gold was sold at Rs236,625 after it recorded a decrease of Rs601, according to rates shared by the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA).

On Friday, gold price had decreased by Rs300 to settle at Rs276,700.

Meanwhile, the international rate of gold reduced on Saturday. As per APGJSA, the rate was at $2,657 per ounce (with a premium of $20), and down by $6 during the day.

Silver prices remained stable at Rs3,050 per tola.

On Thursday, gold prices hit a record high level of Rs277,000 per tola in Pakistan.

Experts have attributed the recent increase in gold prices to global developments, including escalating geopolitical tensions in the Middle East, Fed rate cuts and soaring demand from major markets like China and India.