In this article, we will discuss
As we progress into the latter half of 2024, the time may be just right to revisit your investment portfolio and consider new investment ideas to achieve your financial goals. While mutual funds and options trading may have gained tremendous popularity in recent years, there are various other overlooked investment opportunities that you could consider to diversify your portfolio effectively.
In this article, we take a closer look at some such investment options, so you can revise your investment plan and make it more efficient if needed.
7 Best Investment Opportunities for 2024
This year, some conventional investment options are making a comeback, as are certain other lesser-known investment opportunities. Take a look at the top 7 options you can consider for your investment portfolio in 2024.
1. Direct Equity Investments
If you have gained some experience in trading and investments, you can consider direct equity investments, which involve purchasing the shares of individual companies listed on the stock exchanges. You may earn dividends if the company you invest in decides to distribute its profits. Additionally, if the shares increase in value over the investment tenure, you also earn capital gains in the process. While this investment opportunity may deliver inflation-beating returns over the long term, it also comes with higher risks because stock prices can be volatile.
Risk profile: High risk, high potential returns
Suitable for: Investors with a long-term investment horizon and a high tolerance for risk
2. Government and Corporate Bonds
Government bonds and corporate bonds are debt securities that allow you to earn a fixed income over the investment tenure. India’s bond market is thriving again, with the country’s banks aiming for a record infrastructure bond issue for the second FY straight. The State Bank of India also recently raised Rs. 10,000 crore via bond issues. These instruments typically offer regular interest payments at a predetermined coupon rate and return the principal at maturity. While government bonds are low-risk securities due to the sovereign guarantee, corporate bonds offer higher yields but also carry higher risks.
Risk profile: Low to moderate risk, moderate and stable returns
Suitable for: Conservative investors seeking steady income and capital preservation
3. Commodities
Commodities are physical goods traded in national and international markets. They include precious metals like gold and silver, agricultural products like rice, wheat and cotton and energy resources like natural gas and crude oil. Investing in commodities is possible through futures contracts or exchange-traded funds (ETFs). You can also consider trading in these instruments if you want to leverage short-term and medium-term price movements. That said, bear in mind that commodity prices can be extremely volatile and are affected by weather patterns, geopolitical developments and global economic news.
Risk profile: High risk, potential for significant price swings
Suitable for: Investors seeking diversification and a hedge against inflation
4. Real Estate Investment Trusts (REITs)
This investment opportunity involves buying into a company that owns and operates income-generating real estate. It is an excellent alternative if you want to invest in real estate but do not wish to pay a lump sum amount upfront because it lets you gain exposure to the real estate market without directly purchasing property. REITs may also have higher dividend yields than stocks as they are required to distribute at least 90% of their taxable income to unit holders. With this investment idea, you can invest in different types of real estate, including residential, commercial, industrial and healthcare properties.
Risk profile: Moderate risk, with a potential for steady income and capital appreciation
Suitable for: Investors who want real estate exposure and regular income without the responsibility of property management
5. Initial Public Offerings (IPOs)
IPOs offer an investment opportunity to purchase the shares of a company when it first goes public and is listed on the stock exchange. By carefully choosing your IPOs this year, you can get early access to potentially high-growth companies. You can also benefit from possibly high listing gains, depending on the level of interest in the company. That said, it is crucial to approach IPOs with caution because newly listed companies do not have a proven track in the public market. This is why it’s important to thoroughly research the company, its financials and growth prospects.
Risk profile: High risk, high potential returns or significant losses
Suitable for: Investors with a high tolerance for risk who are comfortable with potential volatility
6. Peer-to-Peer (P2P) Lending
In peer-to-peer lending, you provide loans directly to borrowers who may not be eligible for loans from traditional banks and financial institutions. You can explore this investment idea via P2P lending platforms, which allow you to extend various types of loans like personal loans or business loans to interested borrowers. These loans carry different risk levels, and the interest rate is often commensurate with the risk taken. You can also fund loans entirely or partially to diversify your risk. It’s essential to assess the creditworthiness of the borrower and the reliability of the P2P platform before you pursue this option.
Risk profile: Moderate to risk, depending on the loan selected and the level of diversification
Suitable for: Investors seeking potentially higher yields, if they are comfortable with the high risks associated with unsecured lending
7. Sustainable Investments
Also known as ESG (Environmental, Social, and Governance) or socially responsible investments, this investment idea focuses on companies that aim to create a positive social or environmental impact. When you choose sustainable investments, you essentially align your investment portfolio with your ethics and values. You can invest sustainably by choosing the stocks of companies that adopt notable ESG practices or opt for ESG mutual funds instead. The former option requires more research and involvement on your part, while the latter gives you the benefit of professional fund management.
Risk profile: Varies depending on the specific investment
Suitable for: Investors who wish to align their investments with their values and believe in the long-term financial benefits of sustainable business practices
Conclusion
These investment ideas may be worth considering if you are planning to diversify your portfolio in 2024 and want to find assets or schemes that align with your risk profile. That said, for many of these investments, you need a demat account and a trading account. For instance, if you are investing in commodities via ETFs or planning to purchase REITs or bonds, you need a demat account to hold the assets in electronic format.
You can open a demat account with Samco Securities easily and start investing in equity, ETFs, bonds or any other dematerialised securities. You can also use the trading account to purchase or redeem your direct equity investments and other exchange-traded securities as required.
Disclaimer: INVESTMENT IN SECURITIES MARKET ARE SUBJECT TO MARKET RISKS, READ ALL THE RELATED DOCUMENTS CAREFULLY BEFORE INVESTING. The asset classes and securities quoted in the film are exemplary and are not recommendatory. SAMCO Securities Limited (Formerly known as Samruddhi Stock Brokers Limited): BSE: 935 | NSE: 12135 | MSEI- 31600 | SEBI Reg. No.: INZ000002535 | AMFI Reg. No. 120121 | Depository Participant: CDSL: IN-DP-CDSL-443-2008 CIN No.: U67120MH2004PLC146183 | SAMCO Commodities Limited (Formerly known as Samruddhi Tradecom India Limited) | MCX- 55190 | SEBI Reg. No.: INZ000013932 Registered Address: Samco Securities Limited, 1004 - A, 10th Floor, Naman Midtown - A Wing, Senapati Bapat Marg, Prabhadevi, Mumbai - 400 013, Maharashtra, India. For any complaints Email - grievances@samco.in Research Analysts -SEBI Reg.No.-INHO0O0005847
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