Fix a long term IRR
Interest rates are dropping.
- Govt wants to link small savings with Govt securities of similar maturity
- PPF rates will be bench marked against 10 year bond yield
- Banks continue to demand reduction in small savings rates.
Lowered Inflation and GDP returns are dropping overall Equity returns
- Even PPF rate reduced from 8.7% to 8.1%
- Interest rates are dropping to as low as 6.5% to 6.75%
As Market matures equity reward and risk reduce and so the returns
- Investors are cautious while increasing equity exposure
- As economy is maturing, returns are falling
- Investors chasing high risk products like low rated bonds due to obsession with high returns could result in big losses.