The Reserve Bank of India (RBI) is signaling possible rate cuts in the coming months. While this may benefit borrowers, it presents a challenge for investors who rely on fixed income.
When interest rates drop, bond prices rise—but new bond investments offer lower yields. As a result, investors may need to rethink their fixed-income strategy.
So, what can you do?
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Look for higher-yield corporate bonds that offer better returns, but be mindful of credit risk.
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Target long-duration government securities now, as they benefit more from rate cuts.
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Consider debt mutual funds with dynamic bond strategies.
The key takeaway? With falling rates, smart bond investing means adjusting your portfolio to maintain returns without taking on unnecessary risk.
