The stock market has gone up quite significantly over the last year. If you think about Diwali last year it was not expected that the market in the first half of the calendar year would go up.. but it did and last week markets again climbed to its highest nifty point .
The market has been led by the banks while other sectors like IT and Pharma have lagged behind quite a bit. The other growth areas have been the mid and the small caps.
Over the last three odd years, ever since the BJP government took control at the centre it has been expected that the infrastructure arena will heavily do well.. that however has belied all expectations.
Now is the time for this sector to brighten up and lead the way. If you look at the market , and the most recent iip..things seem to be looking up for this sector.
It is high time that we seriously looked at this sector for our investment.
How can we do this ?
1. Invest in the mutual funds that service this sector.. ie thematic infra funds.
2. Invest in the mutual funds that are investing some part of their funds into this sector.. mid or large caps.
3. Invest directly into some specific stocks in these areas.
Point no 3 is a direct strategy where you would need to do your homework. So if you have the time and the inclination ..that is the best method.
Now usually people say don't invest in thematic funds because of the diversification risk .. but to me that is precisely why I want to invest in this. This sector will boom and having a diversified portfolio will make your returns smaller in a bull sector.
For the above you need to have confidence that this sector will boom.. else choose option no 2.
It's simplefinancialsense.
Comments more than welcome
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