As we enter the New Year, there is a growing sense that this could be a year of huge wealth creation for those investing in India.
The stock market is on a firm upward trajectory, the debt market is waiting for a boost from likely softer interest rates and the property market could well come out of its slumber on the back of policy moves to ease liquidity for buyers.
Year 2014 saw a definite change in investor sentiment with despondency giving way to a sense of optimism on the future direction of the economy.
It was a year of major political change as the National Democratic Alliance (NDA), with its promise of development and good governance, firmly established itself at the centre, while taking several key states under its fold.
Hopes are building of big-ticket reforms going through, such as introduction of the long-pending bills on Goods and Services Tax and insurance, even as the government strives to ease the legal and policy environment for business.
The continuous fall in Wholesale Price Index inflation, which touched zero towards the year-end on the back of a major slide in global crude oil prices, has raised hopes that the Reserve Bank of India would cut its key rates starting early 2015, maybe in more tranches than one.
Availability of cheaper credit could spur loan off-take and provide a boost to economic activity. That, in turn, could act as fuel to an already buoyant stock market.
Equities had a great run in 2014 with the BSE Sensex rising nearly 30% since the beginning of the year to 27,350 on December 12.
There is wide consensus that we are at the early stages of a long bull-run in the market that could extend over several years. On another front, if the central bank cuts key policy rates, debt could give good returns.
Sensing money to be made, foreign institutional investors (FIIs) are pouring in funds into Indian equity and debt, with over Rs 1 lakh crore invested during 2014.
Rate cuts could also spur the Indian real estate market that has been going through a rather rough patch over the past few years with low off-take leading to a huge inventory pile-up across the country.
However, if you are a commodity investor, you need to be cautious. Commodity prices across the board, barring a few items, have fallen during 2014 on weak demand due to slowdown in China and Europe.
With each asset class facing its own pulls and pressures, how should you position your investment portfolio for the New Year?
Our cover package starting on page 16 delves into each asset class and the factors that are likely to impact them. We also bring to you the best investment strategies for the year ahead.
Some of the best minds in each of these areas have written exclusively for you to give you a broad picture for 2015. The Money Today team wishes you a happy and prosperous New Year.
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