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How to invest for India’s ‘Amrit Kaal’

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There is an air of anticipation. India turns 100 in 2047, and if it continues to maintain the growth momentum of the past three decades, some dramatic changes will occur in the economy. A new report by EY, a global consulting firm, highlights that India will become a $26 trillion economy by 2047-48 when it turns 100 as an independent republic.

“The growth projections for the Indian economy are the highest for any large economy over the coming decades,” the consultancy said in that new report. India’s rising exports, digitalisation, low debt-GDP ratio, thriving entrepreneurship and relentless commitments by the government towards infrastructure and clean energy make it an attractive economy for investors.

India’s economy is currently growing at the rate of 6% per annum. The global consultancy estimates that India will have a per capita GDP of $15,000 annually, even at that rate. That would put India in the developed economies category.

If long-term institutional investors like foreign pension funds, global emerging market funds and local mutual funds can commit to investing, you can do so too. You can learn from their behaviour. There is a lot of information every month in the press about sectors and stocks that foreign portfolio investors prefer to buy, hold or sell. A similar trend is recorded for domestic mutual funds too. There is no need to follow any particular pattern. You can read about these investors and choose to do nothing.

When interest rates rise, your appetite for risk goes down. There is always that temptation to chase risk-free short-term returns over risky but much higher long-term returns. An average yearly fixed deposit these days offers a return of 7% per annum. That could make you avoid committing more money towards equity assets. There is always a risk of companies or sectors you invest in losing value. However, in the long term, equity assets often manage to offer superior returns that can help you beat inflation.

Your long-term goals, like your child’s professional education,  a new house at a convenient location or retirement, need your help. A higher asset allocation to equities can help you meet your financial needs for your long-term goals. At the same time, you can beat the average inflation rate in the economy and create wealth. You can set the course by picking up the right basket of stocks or mutual funds. You want to make sense of the enormous data and need professional help. You also need a solution that is worth the effort.

If India’s economy is a story of the next 25 years and you are 25, it is the best time to start investing. If you have not started yet, you could also look at technology-backed platforms like Alphaniti. It’s data driven and relies on statistical, mathematical and quantitative models that overcome emotions out of human bias and noise. That is an excellent way to start your financial journey.


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