Investment karna Jaroori hai kya ?

One common mistake people make while discussing about stock market is using the term Investment & Trading interchangeably , However , they are not the same .
Trading – Buying & Selling of the security to earn the price gap as Profit. You don’t need to fall in love with security / company.
Investments – To Buy the security & hold it for longer duration , aim is to maximize the wealth. (You actually fall in the love with the security)
Investment can be as short as for 4-6 months to as long as lifetime.

In this post we will try to understand which are the best sectors to invest while keeping the following parameters in mind.
1. Wealth Maximization
2. Minimum Risk
3. Asset appreciation
4. Regular Income

Let us understand with the favorite investment option available is – Fixed Deposits in Bank
1. Wealth Maximization – You get Compound Interest throughout
2. Minimum Risk – Deposits in Bank are safe(?) at least we can assume it
3. Asset appreciation – Hope that bank interest Rates will rise
4. Regular Income – Quarterly/ Semi Annual Interest

When we say Sector selection in Investment in modern terms, it applies to all – Equity Shares, Fixed Income Securities (Corporate + Govt. Bond) etc.

1 FMCG
No matter whatever happens people are going to start their day with toothpaste, soap etc. In fact more the people will be in home more they will consume it. There will be no outside substitute for these products. People will change their preference as per their Income, Trends etc. but won’t stop to use it.
All these make FMCG companies very safe investment option

2 Pharmaceutical
Again as explained earlier like FMCG , Medicine is our basic need that can be tablets, surgical instruments, other daily products etc. Nowadays sanitizer has also got huge market scope.   
Pharma Company’s main growth depends on 2 factors -how well they increase the sales and continuous R&D. Emerging generic medicine market also cannot be ignored.
There are many Indian as well as foreign companies which are doing well in all of the above.

3 IT
IT Industry is very broad, can be classified in IT Services, IT consultancy and so on. Following are the reasons to go with IT Industry
A The main business of Indian IT Sector is from the US
B Since the main business is from US, settlements are done in the $
C Technological Demand is going to increase day by day (Work from demands more technology)

4 Financial Services (Excluding Banking & Insurance)
Why No Banking? – I will write one whole post on Banking  & Insurance sector not to be chosen
So, In the Financial Services – what is to be focus ?
 A Asset Management Companies
 B Foreign Exchange Service Companies
 C Investment Management Companies (Hedge Funds, Private Equity)
 D Credit Rating Agency
 E Consultancy Firms
Increasing trend towards investment & financial planning has led to development of Financial Services Companies. This trend is new in India ,100% FDI is allowed in this sector however cross border services as grown significantly in the recent years

5 E-Commerce
Nowadays people don’t want to go to shops , they buy everything literally everything Online
Let us have some numbers -

(Source - https://www.statista.com/statistics/792047/india-e-commerce-market-size/)
The numbers are enough to prove that how fast the E Commerce market is developing , hence is a good opportunity to invest in

6 Educations
India is moving towards online & distance learning. Few Indian brands have done extremely well in the last 2 years

7 Other Sectors
    A Oil & Refineries
    B Renewable Energy


Over the years , Investment in these sectors have been proven successful , There is no hard and fast rule for Investments; Everyone invests as per their goals & risk appetite

Do Invest! Earn More!! 

## Special Tip –“Never put all your eggs in one basket”-  Warren Buffet

Prathamesh
(05 April 2020)

Comments

Shreya said…
Nice write up and easy to follow especially for first time investors :-)
April 20, 2020 at 8:41 PM
Prathamesh said…
Thank u Shreya , For regular updates do visit the blog
April 20, 2020 at 9:16 PM
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