IT in Real Estate Market Report provides detailed insight, industry knowledge, market forecasts, and analytics. Report on Global IT in Real Estate Industry also

As most of the shares prices are down in 2019, what stocks do you suggest one should buy in the Indian market?

I can’t get stock specific. What I can do is give you a broad idea.

Small-Cap Index

One of the most beaten down indexes is the small-cap index.

In the year 2008, the small-cap index corrected about 71% and the respective year return for 1 year was about 107% and the next 3-year CAGR was 17%.

In the year 2011, the small-cap index corrected nearly 34% and the respective year gave a return of 37% and the next 3 years CAGR was 25%.

in the current year, small cap has been continuously underperforming the index. There are many losers in the small-cap index which has brought down the small-cap index to -32%.

Nifty has only corrected 10% during this time. Most of the weakness in the small-cap index has been justified with either heavy debt, weak industry performance or facing corporate governance issues.

Now, this is the right opportunity for you to pick up the Select Small Cap stocks which have high quality and resistance towards markets poor performance.

We have used our proprietary method of analysis which is known as VMi25 and made a model portfolio. The same methodology has been backtested and the results were 27% CAGR including such period of poor performance. VMi25 should definitely outperform the small-cap index.

Sector Specific

Firstly you have to understand that leaders of the last bull rally are not going to be the leaders of the next bull rally. Prices have already priced in and by investing in Infosys or TCS now would not give you the returns that it had given in the yesteryears.

Insurance

This sector has a good opportunity in the future.

Source[1]

The insurance industry of India consists of 57 insurance companies of which 24 are in the life insurance business and 33 are non-life insurers. Among the life insurers, Life Insurance Corporation (LIC) is the sole public sector company. Apart from that, among the non-life insurers, there are six public sector insurers. In addition to these, there is sole national re-insurer, namely, General Insurance Corporation of India (GIC Re). Other stakeholders in the Indian Insurance market include agents (individual and corporate), brokers, surveyors, and third-party administrators servicing health insurance claims.

I would go for private insurers generally private sector[2] performs better than the public sector.

The future looks promising[3] for the life insurance industry with several changes in the regulatory framework which will lead to further change in the way the industry conducts its business and engages with its customers.

The overall insurance industry[4] is expected to reach US$ 280 billion by 2020. The life insurance industry in the country is expected to grow by 12-15 percent annually for the next three to five years.

Asset Management Company

The country’s mutual fund industry has huge growth potential as Indian households’ savings amount to ₹ 20-30 lakh crore, a top official of an asset management company said today.

“We are already witnessing a gradual shift in household savings as dominance of physical savings (real estate and gold) is going down, while the share of financial savings is growing,” HDFC AMC Managing Director Milind Barve

  • The Association of Mutual Funds in India (AMFI) is targeting nearly five fold growth in assets under management (AUM) to Rs 95 lakh crore (US$ 1.47 trillion) and a more than three times growth in investor accounts to 130 million by 2025.

I am sure you would agree with me that one of the best options today to beat inflation is to invest in equity. Everyone does not like to take and pay for professional advice as it is very expensive. Next big option is Mutual fund.

Real Estate

Real estate sector comprises four sub sectors – housing, retail, hospitality, and commercial. The growth of this sector is well complemented by the growth of the corporate environment and the demand for office space as well as urban and semi-urban accommodations. The construction industry ranks third among the 14 major sectors in terms of direct, indirect and induced effects in all sectors of the economy.

Keeping in mind the density of India we are on a positive side. With more standardization from the government side with RERA and companies like Blackstone coming into a REIT is a huge positive for the sector.

This industry has limited supply and never-ending demand.


The above are some of the sectors which can witness high growth rate. There are also other sectors which are still not in listed space and are mainly available in the private space such as gaming, insurance, exchanges, financial services (Finotech), e-commerce, etc. Private space advantages and disadvantages are listed below.

Source[5]

Stocks and Sectors are always secondary. The most important aspect when it comes to investing or trading is the attitude.

One of the classic example when it comes to attitude is listed below. It might seem a very small aspect but it is a very important aspect.

I have also written a detailed answer on Options Trading.

With proper risk management, can an options trader beat a long term investor in terms of wealth creation?

Possibly if you just starting out reading the below article.

I am 19 years old. I want to invest in the stock market, but I lack the knowledge. How should I proceed?

Go Look at your Investing and Trading Strategy right away. These small tweaks will have a larger impact on your Trading and Investing activities.

If you have reached till here than I am sure you have enjoyed reading the article. An upvote and share would really motivate me to write more similar queries.

Thanks for reading

Footnotes

[1] Insurance Industry Market Growth in India – Infographic

[2] Insurance Companies in India

[3] Indian Insurance Industry Analysis

[4] https://www.ibef.org/uploads/ind…

[5] Look before you leap from listed to unlisted equities