While the year 2020 was a lot of things for different people, for Indian investors, it was a year of learning. Though the pandemic isn’t quite out of the way yet, the environment is more feasible for investors now. Here are some of the best strategies you can employ if you intend to make 2021 a good time for your investments:
- This year is expected to be the phase of economic revival for the Indian economy as well as the global economy. While you can expect certain sectors to perform well, do not limit your portfolio only to these sectors. Maintain a balanced portfolio with a part of your investments in rapidly growing sectors and some part in other sectors, which are likely to grow in the coming quarter.
- Try and invest in companies that have the potential to grow in 2021. After showing a downward trend in the previous year, certain sectors will rise steadily. Keep an eye on companies that are planning an expansion or are looking to launch new products and services. It is also advisable to go for new businesses and startups in sectors that are currently performing well.
- Avoid investing in penny stocks. They’re risky, but appear attractive and create an illusion of abundance, which makes investors feel that these stocks will yield higher returns. Also, their performance is inconsistent, which will cause your portfolio to attract more risk. Moreover, 2021 can be a good chance to learn from bad investments made in 2020.
- Go for international equities. You will be exposed to better opportunities, most of which may not be a part of the Indian stock market. You can expect the same amount of risk but that will be balanced out because of diversification. It is advisable to invest in sectors like ecommerce or digital OTT platforms since they are showing tremendous growth but don’t offer investment opportunities in India.
- Try something new but follow a tried-and-tested approach for your investments. While it is good to try out new investment strategies, a safety net should always be present. For example, if you haven’t invested in an IPO, you could try it this year. But do not rush into it or invest only in IPOs.
Most of the investment strategies you follow will be influenced by the investments you choose for 2021 and will also help you clean out your portfolio.