 "Home safe in retirement, best online shopping: Top personal finance stories")
This week's lead story by Sanjay Kumar Singh and Karthik Jerome aims to serve as a guide for senior citizens who plan to buy a house in a project meant exclusively for them. The article explores the benefits, potential drawbacks, and the checks prospective buyers must conduct before making the buy decision.
The second story by Namrata Kohli delves into the subject of online festival shopping in India, highlighting the substantial discounts available across multiple e-commerce platforms. It also advocates astute purchasing behaviour and warns consumers to exercise vigilance against the risk of counterfeits and lower-quality products sold online.
If you are not sure about the direction interest rates are likely to take in the near future, and whether you should invest in a short-, medium- or long-duration fund, go for a dynamic bond fund. Before you do so, look up Morningstar’s review of SBI Dynamic Bond Fund.
This festival season both car manufacturers and lenders offering car loans will come up with mouth-watering discounts and fee waivers. If you are thinking of taking a vehicle loan, look up Paisabazaar.com’s table on interest rates and other charges.
NUMBER OF THE WEEK
4.80%: Peak 10-year US bond yield on October 3, 2023, highest since 2007
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Several factors were responsible for the spike in the US 10-year government bond yield this week. China has sold $300 billion worth of US treasuries since 2021, including $40 billion since April 2023. Experts say this could be one of the major reasons behind the spike. Since China is embroiled in its own economic difficulties, it has fewer dollars to invest in US treasuries.
US inflation remains above the Federal Reserve’s comfort level and the country’s central bankers have suggested that more rate hikes may be necessary. This is another reason causing the sell-off.
The 10-year government bond yield in India had touched a low of 6.96 per cent on May 16 but is currently at around 7.24 per cent level.
The Reserve Bank of India has been in pause mode. Consumer price inflation in India remains above the RBI’s comfort zone of 2-6 per cent. An erratic monsoon, high food prices, and high crude oil prices threaten to keep inflation at elevated levels. As a result, interest rates in India may also stay higher for longer. Most experts believe the first rate cuts may only happen in Financial Year 2025.
Investors should keep the bulk of their debt mutual fund investments in shorter-duration funds. They should match their investment horizon with the duration of the fund. They should pause for some time before taking exposure to longer-duration funds.