The Union Budget presented by Finance Minister Nirmala Sitharaman is encouraging investors to think differently about how they invest in stocks. The government is focusing more on growing the economy by increasing spending among everyday people, which is likely to boost sales in many industries.
Recently, stock market indexes related to things people consume, like food and everyday goods, jumped nearly 5%. This rise is mostly because the government has announced tax breaks for middle-class families, meaning they will have more money to spend. Experts believe this extra money will lead to more purchases in areas like dining out, travel, and home improvements.
According to Chakravarthy V from Prime Wealth Finserv, people will spend more on renovating their homes, getting better electronics, and enjoying leisure activities. With this in mind, investors can find opportunities in stocks that are directly linked to rising consumer spending.
Many analysts suggest focusing on large companies, recommending that 75% of investments go into large-cap stocks, while 25% should be in smaller companies. They all agree that the best area for investment right now is consumption-related stocks, with a 38% share of the portfolio. This includes stocks in food companies, retail, lifestyle products, cars, and more.
Analysts are also excited about the banking and finance sector, which should benefit as people save more money in banks and borrow for new purchases. They believe investors should consider putting 23% of their money in banks and financial services.
For those not interested in picking stocks directly, it’s a good idea to invest in diverse funds that cover large, mid-size, and small companies. Some recommended funds include Nippon India Consumption Fund, Tata India Consumer Fund, and SBI Consumption Opportunities Fund.
Lastly, if you want to look beyond stocks for long-term gains, experts suggest a mix of 80% stocks and 20% bonds. This balance could help you grow your money over time while keeping risks low.
Individual stock picks that analysts like include Trent, Zomato, Swiggy, D-Mart, Bajaj Auto, Maruti, Nykaa, Titan, and Indian Hotels.
Note: The opinions given by experts are their own and do not reflect the views of NiftyStat.
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