5 investment options this Diwali to become rich
Diwali is a great time to have a relook at your portfolio. Markets are poised to do well, though certain sectors of the economy are still in a bad shape. In terms of money-making opportunities in present times, these are my five best ideas:
Small and mid-cap stocks
While the frontline indices have remained steady or witnessed a correction up to around 15%, small and mid-caps have seen a massive erosion of valuation. Correction even in quality names has been significant and these scrips present a great buying opportunity. Investors with a high-risk taking ability and long-term investment horizon can start investing a small proportion of the portfolio into the mid and small cap space.
For investors not well versed with the markets, investing in ETFs is a brilliant idea. ETF investing is a very cost effective and easy way to participate in the equity markets. You can select various segments of the market, depending upon your risk profile and return expectations.
Even International Equity Market exposures can be taken with the help of ETFs. Markets, in India, are poised to do well and ETF is an ideal choice for common investors with a long-term investment horizon.
The yellow metal has done very well over the past few months and it is amongst the best performing assets in 2019 with almost 20% return.
With global economic uncertainty still looming large and rising geopolitical concerns, gold is likely to continue to glitter. Moreover, adding gold in the portfolio can be a good hedge against inflation and a good diversifier.
With fixed deposit rates plummeting, corporate bonds are a good option for risk-averse investors seeking fixed return options. These can be issued either by private and public corporations. In some cases, the bonds are listed on the stock exchanges as well.
Depending on the credit rating of the issuer, the investor can get an idea of the credit risk he is exposed to. Hence, investors need to select only well-established corporates having a good track record of honouring their financial commitments.
Initial Public Offerings are a great option to make profitable, long-term investments. After recent successful IPOs such as Polycab and IRCTC, this market has become alive and active. Many leading companies which are planning to list their subsidiaries or verticals will be eyeing this space and will provide enough opportunities to the investors in the coming years. Needless to say, that one will need to select carefully which IPOs to invest in.