Whenever we get huge lumpsum amount. First inclination is to buy a Flat. And no one actually talks about investing in mutual funds , Nifty Etf or like.
Reason is simple.
When you buy a flat, you can take house Insurance.
Even if earthquake or fire happens, the value of house is protected.
If you have a home loan, then term insurance also Loan insurance (from bank) covers the dues incase of our untimely demise.
There is basically no downside risk with flat or house purchase.
In Case of Nifty, no body knows about the insurance stuff.
Share market main insurance kaha hota hain?
18000 strike, Nifty December 2023 Put option premium has a Time Value of just 50 points today. (Please, Ignore this if it was mouthful of jargons.)
Basically, if you have tax saver, Large cap MF or Nifty etf worth 10 lakh…
This Put option is providing you with insurance at meager rs 2,500 rupees until December end.
Buy this and even if Nifty sinks down till 10 thousand levels (currently at 17,000 levels) , all the loss you might face with your MF or ETF will be repaid to you back from this Put option Insurance !
Brokers who earn commission on every transaction will not like this.
It has only one trade for next 10 months. They will earn just rs 20 from you !
MF or PMS will not do this. They loose cash. Mostly non of the managers are skilled enough in Options.
Even SVB bank which failed recently, had to just pay premium to protect interest rate hike. They didn’t. Now it is too late.
Finally a product that avoids any losses when market cashes. (thanks to cheaper insurance premiums).
Talk to your broker and ask if you can buy December contract out option. If he/she says no…talk to me. I will get it done for you.