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Non Linked Market Investments in India
Let’s face it, who doesn’t want to invest in assets that don’t depend on market fluctuations & volatilities?
Investing in the stock market can take you from hero to zero in a matter of minutes, and many other traditional investments such as bonds, mutual funds, et cetera are subject to not only market risks, but also government economic policies & global economic events.
So how do you retain some sort of financial security and a diversified portfolio amid the uncertainty & instability of market linked investments?
Enter: Non Market Linked Investments. Picture this, even in a worst case scenario when the stock market takes a nose dive & most investors are suffering huge financial losses, you can still recoup a lot of your money if you incorporate non market linked investments into your portfolio.
But what exactly are Non Market Linked Investments? That’s what we’re going to dive into today.
What Are Non Market Linked Investments?
To put it simply, non market linked investments are financial instruments whose performance isn’t directly tied to the market fluctuations of traditional investments like stocks, bonds, or mutual finds.
Non Market Linked Investments, which are often also known as alternative investments derive their value from other factors. Such as fixed interest rates, rental income, commodity prices, or even asset backed securities.
Basically, these are investments that do not rely on public equity or tradeable debt markets to generate returns.
Here are some examples of Non Market Linked Investments in India:
- Gold
- Real Estate
- Peer to Peer (P2P) Lending
- Invoice Discounting
- Fractional Ownership
- Commodities
- Cryptocurrency
Features of Non Market Linked Investments
- They are not linked directly to the performance of public stock or bond markets
- They provide more stable, guaranteed returns compared to market-linked investments
- They offer lower risk and less volatility compared to market-linked investments
- Examples of fixed interest plans include: bank fixed deposits; government or corporate bonds; and traditional insurance plans
Advantages of Non Market Linked Investments
Diversification: When you invest in assets that are not linked to the market, you spread out risk over various types of assets, thus diversifying & strengthening your investment portfolio. This kind of diversification may help soften how economic slowdowns affect all your wealth.
Stability: Investments not tied to the market usually show lesser instability when compared with those connected to it. They do not depend on daily market fluctuations for their worth, offering a sense of steadiness and foreseeability even during chaotic periods.
Income Generation: A lot of investments that are not related to the market can bring in regular income, like rental properties or stocks that give dividends. This is very helpful when the economy is not doing well because other ways of earning money might not be steady.
Long Term Growth: Although Non Market Linked Investments might not grow as quickly as stocks, they frequently offer stable and gradual growth in the long run. This kind of slow and consistent method can help protect your wealth from market declines.
How Do I Add Non Market Linked Investments to My Portfolio?
Here are some strategies through which you can make non market linked investments an integral part of your investment portfolio, thereby increasing returns and mitigating risk:
Asset Allocation:
Look at asset allocation in a broad way, by spreading your investments across different types of alternative assets (some non market linked assets) & some traditional options.
Try to achieve a balance that matches with your tolerance for risk, objectives of investment and time limit.
Long-Term Perspective:
Non market linked investments are usually better for investors who can handle changes in the short term, as these alternative investments are often for the long term.
Avoid quick reactions to market drops and keep concentrated on your long term financial goals.
Regular Review and Rebalancing:
Check your investment portfolio from time to time to confirm that it’s still consistent with your investment goals.
You need to maintain balance in your investment portfolio. Regular reviews and assessments can allow you to revise your portfolio, drop underperforming assets or exit those investments, and refinance high performing assets.
Seek Expert Guidance:
Talking to someone who specialises in alternative investments, or financial advisors experienced with alternative investment platforms (such as Assetmonk) can guide you into understanding the nitty gritty details of Non Market Linked Investments.
Get in touch with us at Assetmonk if you want to figure out the right alternative investment option for you, or make a financial plan suitable for your portfolio.
How Do Non Market Linked Investments Compare to Traditional Assets?
| Aspect | Non Market Linked Investments | Market-Linked Investments |
| Risk | Generally lower risk | Higher risk, subject to market fluctuations |
| Performance | Performance isn’t directly tied to market movements | Performance directly influenced by market conditions |
| Stability | Offers stability and predictability | Can be volatile, prone to fluctuations |
| Income Generation | Can provide regular income streams (e.g., rental income, dividends) | Income generation may vary based on market performance |
| Diversification | Helps diversify portfolio across different asset classes | May not offer as much diversification if predominantly invested in market-driven assets |
| Long-Term Growth Potential | Offers steady, incremental growth over the long term | Potential for higher returns but with increased volatility |
| Examples | Bonds, real estate, commodities, insurance products, fractional ownership of commercial real estate | Stocks, mutual funds, ETFs, derivatives |
| Suitability | Suitable for investors seeking stability and income generation, often preferred by conservative investors | Suitable for investors willing to take on higher risk in pursuit of potentially higher returns, often preferred by aggressive investors |
Bottom Line: Connect With Assetmonk
The modern day investment world has drastically changed over the last few years. The alternative investment fund (AIF) industry has seen remarkable growth, even achieving higher growth rates than traditional investment options such as mutual funds.
Investors also are becoming more empowered. More and more investors are seeking higher returns and opting to invest in hedge funds, private equity, venture capital, and alternative real estate.
Through Assetmonk’s innovative approach to fractional ownership, investors gain access to premium real estate assets without bearing the weighty upfront costs. The minimum entry ticket to invest in our fractional ownership models is Rs 25 lakh. Our model allows investors to diversify their portfolio and achieve higher return rates at the same time.
Assetmonk’s web based investment platform offers a transparent and seamless process. We empower investors with real time updates on the property, monitoring capabilities, and customised participation in the decision making processes related to the property.
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