There are various investment strategies to follow in the Indian stock market. However, you should understand that short-term profits are not a solution. You should always study the 5-year chart of a company before investing. This will help you determine whether the company is good for long-term investment or not. You should also know about the latest market trends in India. In addition to following the same, you should study the financial ratios of the company.
Choose to Stay Invested
The Indian stock market has always rebounded from adverse situations, so staying invested in your investments is one of the best investment strategies. Staying invested has allowed many investors to amass significant wealth. There are many fundamentally sound companies that have the potential to recover from a crisis and regain their pre-crisis valuation. By following these investment strategies, you can make a fortune in the Indian stock market. Once you’ve made the right choices, you’ll be glad you did.
Pick the Shares with High ROI
Among the most fundamental investment strategies for the Indian stock market is buying at the right time. Many people make the mistake of investing in 80C schemes, which do not provide higher returns than shares. Additionally, these schemes come with penalties for premature withdrawal. Hence, if you’re planning to make a large lump-sum investment, you should invest it in a good quality equity scheme. It’s much easier to profit from an investment if you know the right time to buy and sell out the stock at a high price.
Opt for Stocks Followed by Advice
Value stocks are often associated with long-established companies with stable revenue and profitability. NMDC, for example, is a government-owned mineral producer and exporter of iron ore, as well as the country’s only mechanized diamond mine. Commodity stocks have historically underperformed the Nifty. Nevertheless, you can consult a financial adviser to help you make the right decisions for your portfolio. When investing in a volatile market, remember to seek professional advice.
Identify and Analyze Hot Stocks
Hot stocks are characterized by high trading volumes, significant volatility in share prices, and news in the stock market. By investing in such stocks, you can get to earn substantial returns. However, it is important to invest early so that you can take advantage of compounding effects and profit from the underlying businesses. You can also choose investment strategies for the Indian stock market based on your risk tolerance and schedule.
Invest Through the Right Medium
Besides retail investors, foreign institutions can invest in Indian stocks through institutional investors. There are many India-focused mutual funds on the market. Another method to invest in Indian stocks is through offshore instruments like exchange-traded notes, participatory notes, and depositary receipts. The latter two are widely accepted by retail investors in the U.S., but many promising Indian companies don’t use ADRs. But there are some investments you can make in India that are worth looking into.
Benefit from the Combination of Investment & Insurance
One of the best investment strategies for the Indian stock market is unit-linked insurance plans. These plans combine the dual benefits of insurance and investment. Moreover, you can get tax exemption by investing in such plans. Some of these plans come with a lock-in period of three to five years. In addition, you will receive income tax exemption and life cover with them. You can choose the one that is right for your risk appetite. Then, you’ll attain peace of mind knowing that your money is safe and secure.
Learn the Art of Momentum Investing
Momentum investing is another way to invest in the Indian stock market. Momentum investing is the process of buying or shorting stocks when the trend continues in one direction or another. Then, you can benefit from the trend in another direction. The price of domestic pharmaceuticals has increased by 40% in the past year, indicating the superiority of these stocks. Many investors jumped on the bandwagon and made a big profit. Momentum investing is one of the best investment strategies for the Indian stock market.
Earn Long-Term Gains Through Passive Investing
Another effective strategy for investing in the Indian stock market is passive investing. This strategy focuses on long-term wealth accumulation by minimizing the amount of money spent on frequent buying and selling. This strategy aims to avoid market timing and fees associated with frequent trading and builds wealth gradually. Passive investing is often called a buy-and-hold strategy since you purchase security with the intention of holding it for the long term. You don’t profit from price fluctuations, and your objective is long-term gains.
Establish Yourself as a Contrarian Investor
Contrarian investors recognize the difference between a share’s real value and its price. They are willing to invest in unpopular companies. These companies may not be popular at the moment, but they may prove to be good investment opportunities over time. Contrarian investors also recognize the difference between the share’s price and its true value and invest accordingly. These strategies are backed by research and specific investment strategies. In this way, you can make a good profit in the stock market without worrying about short-term market trends.