Demonitisation and G.S.T. have changed a lot of things for the Indian economy leaving investors super confused. They cannot simply predict the next reform and its impact on different sectors. For e.g. Demonitisation impacted Real Estate drastically. That’s why its extremely important to diversify, in other words ‘don’t keep all your eggs in one basket’. To make things easier we have listed all the sectors that are ‘IN’ this season and those that are not so ‘IN’. This is basically a quarterly review of the economy.
This is one sector which is currently performing well, though one must select their shares only after doing thorough research. Since 50% of India’s GDP is from the agricultural sector, FMCG and agro based companies are favorite among the investors. While the Pharmaceuticals sector isn’t so popular among investors currently, because of it being a highly regulated market and the U.S.A. imposing strict regulations on licenses of drugs. IT and Infra can be good sectors to invest in for the long term with a minimum lock in period of 5 years.
- Real Estate
Demonetization took a real hit on the real estate sector. The first half of the year saw a dip in this sector but after demonetization easing out and the Benami Property Act being implemented residential real estate has become more transparent than before. In the second half of this year, this sector could show some promising results. It has also witnessed an increase in the flow of foreign investments. So if you are looking at the right time to invest in the real estate market, this is your golden opportunity.
Well obviously investing in Real Estate require a huge sum of money, the markets have made this easier for small scale investors. REIT (Real Estate Investment Trust) which is similar to Mutual Funds now allows you to trade on real estate with minimum investment.
Women and gold go hand in hand at least in India. Whether you’re married, working, studying you will always have a few grams of gold. If you are looking to invest in gold, there is never a wrong time. With prices just increasing every year this one sector will always give you returns however the returns are subjective and lower compared to the equity markets but higher than fixed deposits and savings account. But it is not advisable to put all your money in Gold, try looking for other avenues that will fetch better returns.
The best way to beat inflation is by investing in gold; however after calculating post tax returns gold proves to be more of a hedge than an investment.
It is always a good time to start investing in mutual funds based on your investment goals. The goals could be short term around 5 years or long term around 15-20 years. Before investing in a fund, you should know what your goal (further education, marriage, housing etc.) is and how much risk you can take and depending onthese 2 factors you can select your scheme. In short, 2017 is a good time to put in some of your money in Mutual Funds/SIP and let the market do its magic.
- Savings Account
While savings account will always seem like a safe option, is it worth keeping money idle in a bank that give minimal returns? From October 2011 banks had increased their savings rate to 4% however from 31st July, 2017 banks started slashing rates by 50 basis points to 3.5%. This means that now you will earn even lesser than what you did before. What can you do about it? The best solution is to transfer those funds to another investment option where the returns are higher and risk is on the similar lines. But remember, a minimum balance is required to be kept in the account which could be as much as Rs. 1000 per month to Rs. 5000 per month from bank to bank. We advise you to keep at least 3-6 months of house funds in the savings account and allocate the rest to another scheme.
That was a review of the economy this season, if you still have any questions regarding these investments feel free to ask us.