Sunday, January 3, 2010

Best Investment Options for 2010

2009 was a great year for stock market. It went down in the 1st quarter but after that it has returned over 80% returns to investors in 2009. Fixed interest rates were good in the 1st quarter but began going down over rest of the year. Gold was at record high and touched Rs 18000 per 10 gm. So, how is 2010 going to be like?

You can refer our analysis for best investment optios for 2009 (stock market and gold).

We feel 2010 will be a mixed year. The overall returns will not be as good as 2009. We feel the stock markets will be volatile in 2010 - call it 'w' shaped recovery or whatever. There will be more stock specific action especially in mid cap stocks. The stock market should end 2010 higher than 2009 but it will not be as significant as previous year. So, the investors are looking at ~20% return. Some specific mid caps can give better return. So, we advise investors to wait for the stock market to correct and then invest in some good mid cap stocks for good returns.

For more risk averse investors, fixed deposits can be looked at. Although, the bank interest rates are way down and will probably stabilize in 2010 rather than go up significantly. So, we advise investors to invest in some good company fixed deposits. These can fetch returns of ~ 12%. Good return and the investor need not worry about nuances of stock markets - especially for investors who do not have much time or do not know much about stock market.

NRIs should look at these posts for all the investment details.

For Senior Citizens, we advise investments like PPF, which are most secured and still return 8% return. This is more than bank interest rates. Senior citizens could also look at some good (and safe) company fixed deposits for higher returns.

Gold had a dream run in 2009 and will probably stabilize in 2010. Investors could look at this option too but don't expect very high returns.

Real estate is another sector which typically everyone is interested in. Real estate prices have already started going up. But the balance sheet of a lot of real estate companies don't look good. Rental based earnings - both residential and commercial have gone down in 2009. It is likely to go up in 2010 but investors need to be very cautious while investing in real estate because it is typically a big and long term investment and it needs thorough investigation before making such a comittment. Don't be fooled by high flyers or gimmicks - check the ground reality before investing.

Wish you all a very Happy New Year and all the best for your investment plans!

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