2) Fixed deposit is also an asset class.
For only the third time in the last 15 years, bank fixed deposits was the best performing asset in India, out-performing equities, gold and property.
After returning 32% in 2014, equities (BSE 100) were down 6.4% in 2015. At the same time last year expectations were running high for a strong performance for equities in 2015 on hopes of a reform-oriented government and a V-shaped cyclical recovery in the economy. At the beginning of the year, very few would have given fixed deposits even an outside chance of being the best performing asset for the year.
The importance of disciplined asset allocation for retail investors, to maintain a balance between equities and fixed return instruments was reinforced.
