Dr. Sanjiv Agarwal

Diwali is around and it is festive mood all around with people busy buying, celebrating and investing. This period is considered good, specially for making new investments as it is considered to be auspicious. This could be in bullion – gold, silver platinum or other precious items, immovable property or stocks. It depends upon one’s appetite for investment and risk bearing capacity.

While bullion is considered the most auspicious, it is followed by investment in new property – commercial as well as residential. Investment in stocks is rather speculative and is usually done to try luck unless one is a long term investor. Infact stock exchanges have a special trading session on Diwali called ‘muhurat trading’.

Gold and silver prices are these days passing through a stable phase with bearish trend. The prices are ruling at their lowest in 2014 and are also not expected to rise upwards in short term due to sluggish demand and other global factors. Silver is ruling below Rs. 40,000 a kilo while gold is about Rs. 27,000 per 10 grams. This may provoke fresh buying for consumption as well as for investment purposes in medium term (over a year). Thus, buying in bullion may be expected to pick up in next few days.

Property market too is passing through a bad weather with inventory pile up everywhere including that in Rajasthan. This is due to the fact that retail buyers are not coming forward for fresh investments. Further, despite slow demand off take and stock pile up, rates have not come down. Added to this, taxes and stamp duty increase the cost. While housing loans are available, interest rates are still high with no scope for reduction in near term. ‘Trade fairs’ and ‘property expos’ only prove this demand – supply gap.

Stocks are one investment avenue which many investors try luck with. Reason being that are can invest even smaller amounts unlike investment in bullion and property. But this investment is full of risks and only those who have acumen to make investment choices should dare for investment in stocks. Symbolic investments in small lots can be made including those in mutual funds. What is required is the correct stock identification and timing of decision. Stocks in the infrastructure, financial services, telecommunication and manufacturing sectors may be picked up based on a study or research. The current period appears to be proper timing for new picks as we expect the market, industrial growth and economy to move upward as well as forward from here with the new Government taking up many positive initiatives.

Quality investing is called for – be it any source of investment. That would bring in real cheer and celebrations this festive season.

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January 2021