Our in-house investment pro, Lohit Mannan, sheds light on everything about Investments in India. Here’s a look at the best investment avenues, market trends, and more.
Cryptocurrency and the Regulations Around It
The cryptocurrency industry kicked off with the introduction of Bitcoin in 2008 and today we have over 10K cryptocurrencies being traded across the world. During the Budget 2022, India’s Finance Minister Nirmala Sitharaman announced that the government intends to levy a 30% tax on any income generated from crypto transactions and also a TDS of 1% on all transactions. The government however has currently refrained from suggesting if cryptocurrency is a legal instrument, meaning if it can be accepted as an everyday speculative asset or as a legal tender or form of money to buy and sell anything. Investors wait for formal regulations to be in place for cryptocurrency to make it a more serious asset class.
Model Portfolios – Long Term Growth, Short Term Growth, and Multi-Channel Investment
On the strategic front, asset allocation in Debt and Equity asset classes needs to be decided based on four key parameters viz. investor risk capacity, risk tolerance, age and investment time horizon. The longer the investment term, the higher could be the allocation to equity and the shorter the investment term, the higher could be the asset allocation to debt assets. The rationale behind this is that equity investments tend to be volatile in the short term but provide higher returns in the long term. Further, on the tactical front, investment products need to be chosen smartly based on the market cycles, sectoral outlook, interest rate trends and macro-economic outlook. Investing in different categories of Equity and Fixed Income mutual funds can help achieve diversification in investments and meet financial objectives.
GenZ and Millennial Investors and Trends
Quick, easy, fearless, impatient, and intuitive are a few of the personality traits that describe youngsters. Youngsters are tech-savvy and hence prefer accessing investment platforms via mobile apps; thanks to various state-of-the-art financial apps available in the market. From one of the surveys by Bloomberg, 32% of GenZ chose to save & 13% chose to invest than spend their earnings. Young investors are unafraid of the market risks and are aware of the fact that equity by far gives the best returns in the long run. There is a preference for investing in direct mutual funds powered by FinTech RIAs.
Indian Investors to Pump in 10-25% of Income in 2022 in Financial Assets: Survey by Groww
The survey was conducted among individuals across 357 centres including semi-urban and rural regions. About 9.21% of individuals are willing to invest more than 50% of their income and another 7.97% are aiming to invest 40-50% of their income towards investments this year. The survey also showed that the majority of respondents i.e. 43.17% of investors are looking to invest 10-25% of their income in 2022.
Fixed Deposits’ Importance in Savings
Fixed deposit as an investment avenue offers the safety of principal invested and assured returns for the investors. Corporate FDs offer a higher rate of interest as compared with the traditional Bank FDs along with flexible investment tenor. Further loan against FD is also available in case of a financial emergency. Corporate FDs may be suitable for investors looking to invest for the short term (less than 5 years duration), for investors having a conservative risk appetite and for retirees seeking a regular source of income from FD interest pay-out.
Top Sectors to Invest in 2022
Metals – Prices of multiple commodities have soared to stratospheric highs during the year due to the sanctions being imposed on Russia. According to market watchers, Russia is a commodity powerhouse and a net exporter of many. Any supply-side disruption in the country will boost the prices of metals including aluminium, nickel, and steel, among others.
Utilities – Utilities stocks are considered a safe bet. Going into a turbulent market like we are now, a lot of investors want safe stocks. Utilities stocks can provide reliable dividend payments that make them safe income-generating investments for investors.
Power – The power sector is gaining as power demand is improving. Big reforms have already started such as the Revamped Distribution Sector Scheme and the Electricity Amendment Bill, which when passed, could be a big game-changer.
The Current Dynamics Between the US, Russia and China Shaping Global Geopolitical and Economic Situations
The Russia-Ukraine war is impacting the stability of the global order. Below are the key areas of impact on the Indian Economy.
Crude Oil & Gold Prices – Russia is one of the largest crude oil producers in the world & due to the sanctions imposed by the US on Russia, crude oil prices are expected to rise further due to the ongoing tensions.
Gold Prices – Gold prices also spiked to $2000 per ounce. During the conflict, the equity market became volatile, so many of the investors shifted from equity & other investments to gold investments as gold is considered a haven during such situations.
Higher Inflation – Due to this ongoing conflict, petrol & diesel prices are already at their peak. Prices of the commodities in India are highly influenced by the petrol & diesel prices. India also imports 84% of the sunflower oil from Russia and its price has increased approx. 20% in a month.
The investment business has been a core focus strategy at Bajaj MARKETS. The pandemic changed the way people looked at personal finances. Many had underestimated the power of investing long-term before COVID-19 hit and the fact that having only savings is not the best way to attain financial freedom.
With Mutual Funds and Fixed Deposits at our focal point, our goal is to not only provide our customers with the choice of a suitable product but also the convenience of investing by themselves through DIY processes in a seamless way.
With now Bajaj MARKETS distributing products of PNB Housing Finance, Shriram Finance and HDFC Ltd., our aim is to provide our customers with a wide range of suitable options. Our next step is going to be our venture into US Stocks, DEMAT, and Savings Accounts.
- 0% commission on Direct Plans
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- Investment via lumpsum or SIPs
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Fixed Deposits by Bajaj Finance:
- Interest rates up to 7.35%
- Flexible tenor 12-60 months
- High stability ratings by CRISIL & ICRA
Keep investing and saving through Bajaj MARKETS . The future of investments looks bright, that I can say for sure!