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If the interest is more than 9.xx, I think you can consider making prepayment to home loan. If you are good at stock picking / little risk taking, you can invest in MF or stocks.

When it comes to financial matters, if there are two good choices A and B and you are unsure about it, tick both the options. That way, you will not regret taking the decision later.

So in this case, put 50% of surplus cash into reducing home loan and remaining 50% into the stock market.

Prepay the home loan. Whatever monthly EMI you will save, start investing in an Index fund as an SIP.

Thanks everyone for the quick response. Just to add, I do not directly invest in stocks. All my investments are in Mutual funds through SIPs. Thats why the dilemma.

I guess I will try out SmartCat's suggestion of hedging it.

Did some research for one month on stocks which are promising and seems good buy to me at current levels. Following is the list -
1) Tech Mahindra
2) Indo Count
3) Orient Paper
4) Rubfila
5)Avanti Feeds & Godrej Agrovet (Same Sector)
6) NOCIL
7) Amber
8) HDFC
9) Amrutanjan
10) Huhutamaki India
11) Xchanging Solutions
12) Zensar
13) Bandhan Bank

In addition, META, Amazon, Taiwan Semiconductors & Google from US market seems promising.
I have purchased small quantities in all of these stocks last week.

I think you would have already made a decision by now. But another way to look at this situation is to flip the question - If a bank was offering you FD at 9.xx% plus some additional tax saving, would you still invest in the markets :)

Prepay the home-loan. Even if it is part payment, and even more so when your interest component is higher than the principal component.

Like @DigitalOne said, let the saved money go into SIP mode/Mutual Funds.

This was exactly the reason I put in a query in this thread. I think with the current economic situation, the Index/MFs will not return 10%+ returns in a year.



I pre-paid 1 Lac towards my home loan. Put the other 1 Lac in a debt fund and waiting for the crash :).

Don’t hold your breath for it.

Sincerely,
A noob investor waiting for market crash since two years

Any Idea why the Railway Stocks are going up. Generally after announcement of Divident record date, stocks tends to jump till that date and fall the very next day. However, in case of IRFC it seems its just keeps climbing. Any reason why that is happening?

Always remember the famous quote by legendary investor Peter Lynch
“Far more money has been lost by investors trying to anticipate corrections, than lost in the corrections themselves.”

Market timing is indeed very difficult to do even for the most skillful, professional investors. I strongly believe amateurs should not even try it.
You can increase or decrease your asset allocation along with periodic rebalancing to take advantage of market movements and also manage some risk.

I know a person who sold all equity in Jan-Feb 2020 and he used to brag about the same. But then, he couldn't catch the ferocious market rally, and has been waiting for a major correction for last 2+ years where the Nifty has gone from 7800 to 18800. I don't think he feels the same smugness as earlier.

Multi-year large capex expected in the railway sector in the upcoming Budget.

Railway infrastructure stocks are still relatively cheap even after doubling in price.

Hi Smartcat, can you share a list of stocks in the railways sector for further analysis?
Also, if you have any preferences, would love to hear the same :)

These are the listed subsidiaries of Indian Railways:

RVNL (Rail Vikas Nigam)
IRCON
RailTel Corporation
RITES
IRFC (Indian Railway Finance Corp)
CONCOR
IRCTC

CONCOR & IRCTC are expensive though. Indian Railways subsidiaries have -

- Low or no debt
- High dividend yield
- Low valuations (nobody wants to buy PSU stocks)
- Guaranteed business from Indian Railways

I'm not too keen on private sector railway stocks

I had 200 HDFC and 1000 HDFC Bank shares, among others, before the Kargil war. They were all Rs 10 face value shares. I had bought the HDFC shares in the market at Rs 100+ per share (forgot the price) and was holding for quite some time. I got HDFC Bank through rights issue, and also bought in the market, my average price was around Rs 28.00

Kargil war began and the HDFC Bank zoomed to Rs 110.00, so did HDFC. I sold the entire lot of HDFC + HDFC Bank and made around 70k, feeling like a millionaire. My logic was the shares will fall after the war, which I expected to be of short duration. I told myself I will buy all the shares back and then some! Then I bought a Windows desktop for 60k.

The shares never came down, I never bought them back! Then I got transferred to Bangalore and we had a 4 month old baby, so my wife quit her job when we moved. She could not take up employment for the next few years without any support system there. So I slowly sold whatever other shares I had, and my demat account had nil balance when I was transferred back to Chennai!

I had to change my desktop around 2009, and sold the old one for Rs 1k! The HDFC/HDFC Bank shares got split to Re 1 shares, and we all know what they are worth now!