The countdown for 20119 has begun and investors are hopeful that the New Year will bring better and more lucrative investment options for them as the economy has witnessed favourable changes in the third quarter of the current financial year.
From changing leadership at RBI to the government’s plan of infusing up to Rs 30,000 crore more into public sector banks and 8.1 percent growth in the Index of Industrial Production (IIP) to 18 per cent growth in the consumer durables industry, so far, the market sentiments are well-influenced by the prevailing positive vibes in Indian economy.
Apart from these projections, the machinery industry is experiencing a 22 per cent growth while the automobile sector is blessed with a 16 per cent upsurge. And, the icing on the cake is that retail inflation dropped to 2.3 per cent in November. These recent developments have emerged as a great healer for investors in the post-IL&FS crisis and their confidence has bounced back very speedily. Amidst these productive happenings, Indian equity markets are expected to perform rather bullishly in 2019.
Those who have suspicions due to the upcoming general elections in 2019 must look at the past trends, in five out of seven instances; the market had improved results after the recession. So, getting pessimist in the purview of election is a wrong assumption. The majority of financial experts believe that the market will perform better in 2019 than in 2018 as consumer spending is increasing and the Indian economy growing faster than its arch-rivals in the international market.
Here are some promising options that every smart investor must try in 2019:
Play safe via index funds
Making an investment in index funds is a two-step process that delivers the same with utmost ease and least of the risks involved. The first is, investing in blue chip companies is simply about assessing the stocks and their respective proportion in the market index and then investing the money in exactly the same stocks and in exactly the same proportions. The next step is to ensure that the stocks and their proportions stay in tandem with the index and when the proportion varies the fund managers are required to shuffle the portfolio and make space to reflect the new ones.
Try diversified equity funds
Better absorption of market capitalisation becomes important while investing in Diversified Equity Funds. While the flexi-cap funds and small or mid-cap funds should be considered as important factors, they should not be the only core holdings in the investor’s portfolio. It would be a good choice to go for one or two large-cap funds rather than three or four small ones.
Invest in dividend-paying stocks
Investing in these dividend-paying stocks is a smart choice when the clouds of inflation are just above our heads because these come with profitable interest rates. Whether dividends are profitable or not can simply be measured by calculating dividend yields. Dividend yields can be calculated by adding dividends (the amount to be paid by the companies) to be received throughout the year and dividing it by the stock price.