It is observed that middle class suffers most or lose maximum in terms of their money or savings, when any financial crises creeps in. Every time the share markets go tumble tosser, they are caught napping or on wrong foots. The rich and super riches can withstand the blow of market crash. The poor are not directly affected by it due to their non exposure. So, the victims are middle class people.
The current crash in stock market is a global phenomenon. The Wall Street is the origin, the sub-prime crisis is responsible and the result is global recession. There is hue of demand slump, layoffs, and interest rate cuts all over. India is not totally insulated from these vagaries. This the time one should be more wise to safe guard his investments or savings. No one knows for the sure; when stock market will bottom out. It may take any length of time. It took 3-4 years for the market to bottom out after the Wall Street crash in 1929. Finally when market bottomed out, the stock prices lost to the tune of 89% from the level of pre crash prices! It may not happen this time again or god forbids, it may be further worse.
Indian investors should put their money in debt funds through mutual fund route. The net asset value of such funds goes against the market. When the interest rates are lowered their NAV goes higher. Other stock market related options are gold ETFs (Exchange Traded Funds). They are all weather proof funds, like gold. Their record shows that they have consistent yields. Then there are index funds, they are also safe, but it is better to invest in them through SIP (Systematic Investment Plan) in current unpredictable market.
This is the right time to keep your money in bank deposits. The interest rate is high, likely to be lowered soon. Other option is Public Provident Fund, though there is a limit, one can put maximum Rs70000/- in a financial year. It enjoys the tax relief and it’s interest rate is 8% p.a. That too is exempted from income tax. The mutual funds scheme under Fixed Maturity Plan may be another attractive option. Even that invites tax; it’s yield may be high enough.