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Make money during Modi 2.0! Expert says just make sure you do this to create wealth
Now, with the same government retaining power, markets can do well in future as well, believes Jitendra Solanki, certified financial planner and founder JS Financial Advisors.
Prime Minister-elect Narendra Modi is set to take oath along with his council of ministers on Thursday morning and it is an exciting time for investors. The markets have reacted positively to the NDA win with both Sensex and Nifty touching multiple highs last week. Now, with the same government retaining power, markets can do well in future as well, believes Jitendra Solanki, certified financial planner and founder JS Financial Advisors. "During the first tenure of the government, there was more focus on infrastructure and banking. We can expect the government to continue working on these sectors. This is also a good sign for the stock markets and they are likely to have a good time over the next five years," Solanki told Zee Business TV.
He said that a stable government also makes life easier for investors as lot of their doubts are cleared. "The retention of power by the same government is good for investors. There is always an eye on what new policies would be introduced by the government after the elections. Most investors are vary of political instability and economic continuity. If Narendra Modi government retaining power, both these questions have been answered," Solanki said.
Which mutual funds should you invest in?
If you have been planning to invest in mutual funds but have been waiting for Lok Sabha elections 2019 to get over, now is the time to park your money. Solanki believes that both midcap as well smallcaps are expected to do good over the coming years and can give ideal returns.
"Over the last few years, we have seen that mid-cap and small-cap funds have not done that well. But, with the same government returning to power and continuation of policies, we are expecting these funds to do well in the future. You can invest in these funds. However, if you want to diversify your investments, you can also opt for multi-cap funds," he said.
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Is it the right time to invest as lumpsum?
A big question that would trouble investors is whether they should invest through SIPs or lumspum. Solanki explained that in the long-term lumpsum gives better returns than SIP. This is because in SIP you invest in small parts every month, most probably till the time you don't withdraw your money. So, lumpsum gets more time to compound the interest and give better returns. "It is believed that lumpsum gives better returns when the market is on rise while SIPs offer better returns during falling market," he said.
But, at the same time, the risk is higher with lumpsum investments.
"It is very important to enter and exit at the right time. If you fail to exit from lumpsum investment at the right time, you might got returns as per expectations. So, we always advise investors to break down their lumpsum investments through STP and if possible, through SIPs," he said.
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