2013 is about to end, with beginning of 2014 one big question might bug in to your mind is where to invest money in 2014?
If we recap 2013 than, 2013 was year of stock market, stock market has given 9% return while gold lost its shine by 27.85%, biggest erosion in gold price since 1981. Real estate has shown negative performance in 2013. What Next? Will this trend continue in 2014? I am herewith my own opinion.
I believe that 2014 will be good year for stock market. I see three different reasons for this.
(1) Political Change:-
2014 is year of election. Election result will make major impact on stock market. If UPA government wins stock market will react positively as reforms started by UPA government will continue on other hand if BJP wins Narendra Modi factor will rule the market and Sensex will touch new heights.
(2) Stock Market Valuation:-
Sensex was trading on 20970 in January 2008 and today it is trading on nearly same value 21100. Economy has grown by several percent means stock market should also grow and that’s what I see in 2014.
(3) Investment Demand:-
Investment demand will force stock market in 2014. New government will boost infrastructure project and may energize good environment for investment. Infrastructure, Cement & steel sector will outperform in 2014. Apart from that I see several bank stocks are available at lower price. You should select these stocks for investment.
Performance of Bond and Fixed deposit was not good in 2013. Due to Inflation number of time interest rate was increased by RBI. This has adversely impacted Bond and other debt instruments. As long as inflation rate is high RBI may not reduce interest rate. But I hope that new government will surely take steps to reduce inflation and hence we see bond and other debt instrument performing better in 2014. One can invest in Tax free bonds, Mutual Funds and Fix deposit in 2014.
Real estate price may not fall in 2014 but still we see negative outlook for real estate market in 2014. Already price of real estate is touching sky and it is out of reach from common man’s hand. High interest rate is causing real estate more costly.
Real estate market will only survive only if price of property reduces or purchasing power of common man increases, this will take time.
One should stay away from property market. Purchase property only for self-use (living) and not for investment.
2013 was bad year for gold. Gold gave negative return. Gold may lose shine further in 2014. We request not to do excessive investment in Gold.
Conclusion: – In 2014 you should invest in stock, tax free bonds and FD, Don’t invest in real estate or gold.