The Right Investments to Steer through During the Second Wave

The Right Investments to Steer through During the Second Wave

We are aware of the drastic transformation this Novel Coronavirus has brought about in our day to day life. It not just disrupted our daily routines but, has also majorly affected the nation’s economy especially the scenario that is quite crucial for a budding nation like India that has a humongous population. As the country was gearing up and trying to revive back to normal the second wave of the deadly virus has struck the nation all over again this time the effect is graver as India has set a global record for newer covid-19 cases resulting in scarcity of hospital bed for the deceased and even oxygen shortage leading to a higher rate of fatality.

The acute spread of the lethal virus and its deteriorating impact on the country’s economy has forced the government to rule out the very thought of lockdown. However, the local restriction is come to our rescue, fearing this move the migrant labour has also taken a step to opt for a varied mode of transport to reach their hometown and stay safe with their family. With all the fast-paced transformation how is the country handling its economy?

Needless to say, on par with damages we have faced so is the nation’s economic downfall as well. India has been battling to revive its economy for the past three years and the pandemic has only toughened the struggle for the country. This indeed also has impacts the investors who have to make their choices. So here comes detailed insights of investment and its risk as well as benefits. To begin with, as we witness the global investment climate which is accelerated by central banks which in turn is led by the US Federal Reserve. Thus, as the Liquidity spinning across the globe, with the quest for yield. A certain amount has found its way to India in the last financial year, foreign institutional investment (FIIs) marked a record $37.5 billion of Indian equities while the foreign direct investment in businesses touched 12 percent over the same period as compared to the previous year. 

While, the economist Stephen Roach states, “The fiscal floodgates have been opened as never before: the $900 billion package of late 2020, followed by the $1.9-trillion American Rescue Plan in March, and now a proposed $2 trillion-plus of additional stimulus for infrastructure."

Alongside, this recovery is accelerating a rise in the prices of a commodity that is a warning sign for the country. However, the hidden point here is how much of that money would come to India. As covid-19 positive cases escalated in the last month, foreign equity investors withdrew close to $1.2 billion from Indian markets. However, its impact is not very clear. But, Indian equities have always been very delicate to foreign procurement.

Being well performed throughout last year, the organization could swiftly cut overheads and enhance margins. Additionally, the ‘formalisation’ of the economy: from demonetisation, through GST, and presently into covid-19, tiny firms have been furnished minimal to sustain the strains in our business environment. However, the big, listed firms have taken market share from the smaller ones.

Mirroring these incidents, the Indian shares are notably costlier. Despite the Nifty being dropped by four percent in comparison with the March high of 15,432, being gained 72 percent over the year ending 31st March. 

As all the market are low. The investors are stressed to find a solution to invest to yield their profit. Here a few fields which would certainly yield profit for the investor amid the pandemic. 

Gold: India has always held a high market for the yellow metal which doesn’t fade of its glory. As the Indian women, as well as men, prefer to deck themselves with gold, alongside in the Indian culture every bride is bestowed with gold which signifies their status. Moreover, as the government spends more than their limit resultant the central banks print Indian rupees in turn the gold glitters. Thus, it would be ideal to invest in gold as the other market escalates gold is rising at a rapid pace than other fields. 

Real estate: lands has always been a favourable asset for Indian. But, presently it may not be an ideal investment choice as the interest rates are low which indeed has pulled down the buyers urge. Currently, several families are financially stressed thus the household debt-to-GDP ratio has been inflating for the past three years. But, this domain would gradually inflate and the investors would certainly not be disappointed.

Crypto: Despite being the initial days for crypto in India, it is certainly one of the best choices to invest in it as the Blockchain is a safe way of assuring both the transfer of assets as well as ownership eliminating the cost and intermediaries of the transactions.  

FDs: The fixed deposits are evergreen, they barely keep up with inflation. It only affects the income tax payees. This also benefits the government bonds, if at all the interest rates jump. However, the bonds may lose their value in the short term. Yet, the corporate bonds provide better returns, but striking a balance in risk and reward in this market could be carried out only by the experienced players.