One year investing plan

Being a savvy investor is a three-fold exercise. It entails taking a hard look at your expenditure, honestly putting down an amount you manage save and then investing smartly. Investing smartly means that you need to develop a carefully thought out investment plan.

For short-term goals you can look at liquid funds, floating rate funds and short-term bank deposits as options for this category of investment. Liquid funds have returned around 5 per cent post-tax returns as compared to 5.6 per cent post-tax that your one-year 8 per cent bank fixed deposit gives you. So, if you have funds for investment through a period of one year, you would better go in for bank deposits. However, liquid funds are a good decision, if your time horizon is less than one year - let’s say around a period of six months. And it is clear because the bank deposit rates decrease proportionately with lower periods, while liquid funds will yield the same return for any period of time. Short-term floating rate funds can be considered up to par to liquid funds for short-term investments.
Anyway if you educate yourself about investing and personal finance you’ll probably succeed.