2020 was a year of surprises and most of them weren’t good. People all over the country struggled with managing their finances and the market suffered a lot during the lockdown. While the economy has begun to recover, people are still not sure where they should invest.
They’re also confused as to how they can increase their wealth during these times of uncertainty.
Let us, therefore, take a look at some of the best investment opportunities and wealth creation tactics in 2021:
Looking at the current scenario, we can see that real estate and stocks are going to be the preferred choices of the investors. Even though the stock market went through a series of ups and downs during the lockdown, it is beginning to make a strong comeback.
Many people sold their stocks at throwaway prices out of panic and fear. However, there were many others who either kept their stocks or bought the ones being sold cheap. These people are going to benefit in the coming time as the top companies in the country are beginning to make a comeback.
As always, real estate would remain a favored investment option in 2021 since it is a safe investment. Risk-averse investors are always interested in real estate. Unlike the stock market that may face ups and downs, the real estate market provides stability, which is what a lot of people are looking for at the moment.
These are tumultuous times that serve as a reminder that you should have financial stability so that you can stay safe from future disasters. Let’s say now that you want to build a corpus. Here’s what you need to focus on:
These two factors will play a key role in deciding your financial future.
People often like to invest in mutual funds for building a retirement corpus.
However, once the market shows signs of taking a U-turn, they stop investing altogether and prefer to bailout – even bearing losses while doing so.
If you are in it for the long haul, you should stay patient even when the market doesn’t look favorable. The market serves as a barometer for the Indian economy; if you believe that the Indian economy is growing, you should believe in the market as well.
Now you might be wondering which company you should invest in, given that there are so many. Well, you can invest in the Nifty50 index that is constituted of the top 50 Indian companies. You can be almost certain that these top 50 companies will never shut down, and therefore, you will never lose your money in the long run.
During the March of last year (2020), several people exited their corpus out of panic as the markets suddenly plummeted. However, the shrewd players added to their corpora. Now that the economy is bouncing back, the people who exited prematurely are regretting their decision. Those who made the most of the opportunity by adding to their corpora are celebrating.
If you’re in it for the long haul, always stay patient. No matter the magnitude of the disaster, the market will eventually bounce back. However, if you’re in it for the short run, you can consider exiting at unfavorable times to cut your losses.
How to create a perfect wealth strategy
Wealth strategy means how you are doing to divide your corpus. Well, there are two to three tried-and-tested ways.
• Firstly, we will talk about the high-risk route.
• Let’s say you liked the product or service that a company offers and saw growth potential in that company. Obviously, you would want to invest in that company. Before, you do though you should check whether or not the company has debt in its books. If there is a little bit of debt, it’s alright.
However, if the debt amount is too large, you should reconsider your choice. Failure to repay debt is one of the main causes for the untimely closure of a company.
• Do not invest more than 20 percent to 30 percent of your investment capital in high-risk stocks.
• You can invest 30 percent in medium-risk stocks, which includes mutual funds. Via mutual funds, you can invest in equities as in small caps as they’re low-risk stocks.
• If you notice red in your portfolio, remember that it’s time to invest.
• Nifty50 index is the option that has the lowest risk. In the long run, the top 50 companies are only going to grow. Therefore, stock prices will stabilize and even grow once the disaster subsides.
• Besides doing all this, you should also build a liquid corpus. It will help you accumulate your returns.
There are a few strategies that you can implement to invest and create wealth in the coming time.
The author, Rachit Chawla, is Director, Finance and Technology at Risers Accelerator. The views expressed are personal
(Edited by : Anshul)