The Indian stock market has seen high volatility in recent days. On April 7, 2025, the Sensex fell nearly 3% and the Nifty dropped over 3.24%. At the opening bell, the fall was even sharper—both indices had lost over 4% in early trade. This sudden drop was due to global uncertainty, mainly caused by fresh tariffs imposed by US President Donald Trump.
But even during such uncertain times, smart investors are looking for the right ways to grow their money. If you have Rs.10 lakh and want to invest it today, what are the best options? How can you balance risk and return? Let’s look at expert suggestions and market insights to help you make the right choice.
Impact of US Tariffs and India’s Strong Position
While the US has imposed higher tariffs on several countries, India has not been hit as hard. Experts believe this situation may open new opportunities for India.
Nimesh Chandan, Chief Investment Officer at Bajaj Finserv Asset Management, believes that since India’s trade surplus with the US is only around $45 billion—just over 1% of India’s GDP—the impact of these tariffs is likely to be limited. Moreover, if the US puts more tariffs on other competing nations, Indian exporters may benefit.
This global shift could work in India’s favour and bring growth in sectors like manufacturing, pharma, and IT services. So, even though the stock market is seeing some correction, long-term investors can still find good opportunities.
Current Stock Market Trends: Why Large-Cap Stocks Are Preferred
The market correction seen recently is not entirely unexpected. Over the last year, midcap and smallcap stocks had seen sharp rallies. Their valuations had gone very high, and a correction was overdue.
According to Chandan, this is the time to focus on largecap stocks—big, well-established companies that can handle market ups and downs better. His team has been increasing the share of largecap stocks in their Flexicap Fund since mid-2024.
Largecap stocks usually belong to companies with strong cash flows, good dividend history, and a dominant position in their sector. These are considered safer bets during volatile times.
What to Look for in Largecap Stocks Before Investing
If you plan to invest a part of your Rs.10 lakh in largecap stocks, here are some important points to keep in mind:
- Strong cash flow: Companies that generate consistent profits and have good free cash flow are safer for long-term investment.
- Attractive return on capital: Look for companies that use their money wisely and deliver high returns.
- Strong market position: If a company is a leader in its segment and faces little threat from new players, it becomes more reliable.
- Stable dividend payouts: Companies that give regular dividends show financial health and investor confidence.
- Low beta sectors: Sectors like healthcare, telecom, and FMCG (Fast-Moving Consumer Goods) often show less volatility and are good for stability.
Investment Strategy for Rs.10 Lakh: How to Split Your Money
Now comes the big question: where should you put your Rs.10 lakh to earn maximum returns with acceptable risk? Chandan gives two suggestions based on investor profile—moderate risk taker and low risk taker.
For Moderate Risk Investors (Can take a little volatility):
- 70% in equity (stocks or mutual funds): Rs.7,00,000
- 25% in fixed income (FDs, debt funds, bonds): Rs.2,50,000
- 5% in gold (digital gold, sovereign gold bonds): Rs.50,000
This is a growth-focused strategy. Most of your money will work in equity, which may give higher returns over 5–10 years.
For Conservative Investors (Prefer stable returns):
- 55% in equity (mostly largecaps and balanced funds): Rs.5,50,000
- 35% in fixed income (FDs, PPF, bonds): Rs.3,50,000
- 10% in gold (preferably SGBs): Rs.1,00,000
This setup gives better stability with some exposure to growth. It is suited for people who are near retirement or don’t want much risk.
Why Diversification is Key to Safe Investing
No matter what the market trend is, one rule always works—never put all your money in one place. Diversification means spreading your money across different asset classes like stocks, fixed income, and gold. This reduces risk and improves the chances of better returns.
For example, when the stock market is down, gold often performs better. When gold or equity is not doing well, fixed income products give steady returns. This way, your portfolio stays balanced even in uncertain times.
Best Options to Invest Rs.10 Lakh in Different Asset Classes
Let’s break it down into actual instruments you can choose within each asset class.
1. Equity (Stocks and Mutual Funds)
- Largecap mutual funds: HDFC Top 100, ICICI Prudential Bluechip, SBI Bluechip
- Flexicap funds: Parag Parikh Flexicap, Kotak Flexicap
- Index funds: Nifty 50, Sensex-based low-cost funds
- Direct stocks (if experienced): Infosys, HUL, Reliance, TCS, ICICI Bank
If you are not comfortable picking stocks directly, go with mutual funds. SIPs or lumpsum based on your goals.
2. Fixed Income (Stable Return Products)
- Bank FDs: 7–7.5% interest in most banks
- Post Office Monthly Income Scheme (POMIS): Steady monthly returns
- Debt mutual funds: Short duration or corporate bond funds
- Public Provident Fund (PPF): Long-term safe investment with tax benefits
- RBI Bonds: Government-backed, safe with fixed interest
Choose based on how soon you need the money and what risk you can take.
3. Gold (Hedge against Market Uncertainty)
- Sovereign Gold Bonds (SGBs): Earn 2.5% interest + gold price growth
- Digital gold (via apps): Easy to buy/sell, no storage issues
- Gold ETFs: Traded like shares, based on gold price
Avoid physical gold unless it’s for personal use. Paper gold is safer and more profitable.
How Long Should You Stay Invested?
This is one of the most important questions. The time frame of your investment will decide what returns you get.
- Short-term (less than 1 year): Go for fixed deposits or debt funds. Avoid equity.
- Medium-term (2–5 years): Use a mix of equity and debt. Flexicap mutual funds work well.
- Long-term (5 years or more): Invest more in equity and gold. These assets grow better over time.
Always set a goal—whether it’s buying a house, child’s education, or building retirement funds. Your investment plan should match the time you need the money.
Final Tips for Investors Planning to Invest Rs.10 Lakh Today
- Don’t rush into decisions because of market panic. Think long-term.
- Check your own risk profile before selecting assets.
- Review your investment every 6 months to adjust if needed.
- Avoid putting all your Rs.10 lakh into just one fund or stock.
- If unsure, take advice from a certified financial advisor.
Even in a falling market, there are chances to make smart investments. With a right mix of assets, expert guidance, and some patience, Rs.10 lakh invested today can bring strong growth over the next few years.
