Investment Strategy for 2012
How 2012 is going to be? There may be saddled with banalities springing from hindsight, yet shimmer with possibilities stemming from foresight. Investment plans in India not only helps the investor to save his hard earned money but also to safeguard his family and himself from unanticipated turn of events. A plan to invest relies on various aspects among which risks and returns play an active role.
Investment security is the first thing on investor's mind that indirectly plays a significant role selecting a plan to invest.
List of Top 10 Investment Ideas
Top 10 Investment Ideas in India concentrates on identifying popular endowment prospects in India and its direct association with profit making. According to market analysts more risk that the investor takes, more profits he is likely to earn. Hence, it is significant on the investor's part to have a thorough analysis of the Indian capital market.
1. Invest in Equity
The investment idea offers great money spinning prospects to invest in. The knowledge of the upward trends and the downward trends is highly required to determine the trend of the market.
So what lies in basket for equity fund investors in 2012? Which equity fund can create wealth for him over the next year? Equities as an asset class, and mutual funds as a vehicle, still remain the best tools for creating long-term wealth. Should one stick with his existing basket or explore for better ones?
- One should stick with large, diversified funds with a proven past performance.
- Large-cap funds should form a bulk of the portfolio (around 50-60%), while the rest can be put in mid-cap funds, which can provide regular toffees to portfolio.
- Continue with your existing SIPs.
- Avoid lump-sum investment in funds
- Be conservative and balanced
- Go for large-cap diversified portfolio
- Avoid sectoral and international funds even they did well.
2. Investment in Real estate
When it comes to protected endowment, real estate is always the favored choice for it involves the appreciation value of fixed asset in the investment earnings. Realty sector thrives on the flourishing infrastructure sector which is prominent in the developing nations. Hence, an asset in expanding region will appreciate faster as compared to any other endowments. There is a good news for realty sector investors first is that no repayment penalty to be paid on floating rate home loans and second property prices are expected to remain stable or may show a minor corrections in most of the cities and metros in 2012.
Strategy for 2012:
- Buyer: Go for and bargain hard for near completion or ready to use property.
- Seller: If you are not in hurry, wait until market picks up.
- Tenant: Rents will going up this season.
3. Investment in Gold
Most sought after investment option, endowments in gold are protected and forever appreciating. Gold futures, as per market analysts are the safest investment idea that is highly affected by the economic trends but on the other hand offers quick money.
Strategy for 2012:
There are varied views on gold prices for 2012. Some experts say that it will go up till US$2000, while opponents are expecting a significant drop to US$ 1400 - 1450. Invest smartly, though due to increase in demand may boost the prices, while gold will come down in mid of the year.
4. Investment in Commodity Futures
When the stock market functions adversely, investors prefer to buy commodity stakes. Commodity Futures is an agreement between the vender and the purchaser. It involves buying a product in the future at the existing value. Investing in commodities future secures the future of the investor. Like other option, the demand and supply, and market volatility decides the value of the Commodity futures.
5. Invest in Forex trading
Forex trading yields unparalleled returns. Start Forex trading business with a minimal endowment. This small investment can be utilized to generate greater income if assisted by an elevated leverage margin method. Like trading in stock market, Forex trading also requires an account with either a broker or a bank. Without basic understanding of the trading techniques, Forex trading can turn out be an unsafe business.
6. Investment for Debt
Financial analysts have forecasted that the equity markets would remain fluctuating throughout 2012 and debt market will continue to steal the show. The interest rate volatility has been over now. The interest rate cycle has clearly peaked in 2011. its the time for rate reductions, can be seen from second quarter of the year, for both deposits and loans rates.
Strategy for 2012:
2.Investors are advised to keep most of their debt allocation in FMPs with an average maturity of at least 15-16 months. The product will provide superior post-tax returns, while the rest can be invested in short-term debt funds and income and gilt funds equally. 3.Investors will enjoy better returns from debt funds than from bank fixed deposits (FDs).
7. Investment in Insurance
New online plans have reduced the cost of life cover by almost 50%. Health Insurance portability started(from July 2011), which allowed change insurers without losing benefits. Cap on charge led insurers to stop harsh-selling ULIPs and focus on traditional plans. IRDA insistence on a guaranteed return and offer of annuity by insurer led companies to discontinue pension plans
Strategy for 2012
- Use technology to cut down your insurance cost. Buy online and save big.
- Products are becoming user friendly, but buyers need to be proactive. With fewer agents to give advice, you must assess and understand your insurance yourself.
- Don't be guided by tax consideration while buying insurance.
- Don't buy an insurance plan less than 15 years.
- ULIPs will give benefit only when held for longer period.
- Long-term debt fund are expected to give good returns. Shift the debt portion of your ULIP corpus to the fund option with long term debt holding.
8. Invest in Derivatives
Derivates are fiscal agreements which are obtained from the cost of fundamental assets, such as bonds, equities, etc. They can be in the form of futures, alternatives and exchanges and are used to lessen the hazard of loss arising from the variations in the cost of the fundamental assets.
9. Invest in Short term depositsShort term deposits are made in bank saving accounts and are the easiest kind of investment. Earnings are less as compared to other endowments, but the value of the investment will not decline in short term plan as it is warranted by the bank. The investor is entitled to withdraw the amount at point of the plan which makes them ideal for short term investment. For long term goals you can invest in fixed term investments of the Bank.
10. Invest in Mutual FundsProtected market plan, Mutual Funds are professionally administered joint endowments that collects investments from different investors and invests in bonds, capital market, stakes and other mortgages.
Apart from above stated top investment options other instruments which will perform well in 2012 are:
Invest in Direct investmentDirect investment involves investing in bonds, stakes, assets, long and short term deposits and are administered by professionals who take care of the investment decisions. While investing directly into shares consider the tenure, risk prospects, earnings, diversification and liquidity.
Invest in Capital marketCapital Market is another endowment idea which is believed to be protected and hassle free. In Capital market financial documents like business documentations, treasury receipts and bankers approval are being dealt with.
(Last Updated on 1/16/2012)
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