The current pandemic has compelled people to reconsider investing in stable options. However, a smart investor can still look for safe investments that provide an opportunity for growing their financial assets. Here is a look into what experts believe are the safest investment post COVID-19 that can yield good returns.
- Is Gold still a Safe Bet? The Answer is Yes
Gold has proven to be a great investment option during economic uncertainties. It has continued to shine and still remains a lucrative asset for investing. The present scenario has again put gold in the spotlight.
This precious metal has a distinct advantage when compared to other assets such as Equity and performs exceedingly well during risk periods. It offers protection to investors against market risks or other events that can have an adverse impact on the capital.
The lockdown imposed by the government had clogged activities in the gold market, yet its value remains strong. If we look into the futures data, it is clearly evident that gold is gaining its ground. This implies that investors still consider gold as a safe option.
Gold ETFs have also witnessed positive participation as the banks continue to lower their interests and adopt a policy that supports growth. The first quarter of the current year saw Gold ETFs and other similar products add 298 tons of gold across all regions as per the World Gold Council.
Smart investors have recognized the importance of buying gold right now. The demand for physical gold products has taken a hit. However, the investment forms of gold are trending currently as it has the potential to offer respectable returns in future.
- Future of Pharma Mutual Funds Looks Bright
The pharma sector is certainly benefitting during the current global pandemic and thus, the Pharma mutual funds are popular once again. If we take a look at the returns chart of investments in the last year, the pharma sector funds occupy the second position next to gold.
Shares of drugmakers have bounced in the past three months as there has been a relaxation in regulatory norms everywhere. The outlook for the pharma sector seems really good as the world is currently dependent on drugs and vaccines at the present moment.
Companies working on vaccine development are going to benefit the most during the period. Pharma funds offered returns of 27.55% in the last one year and 8.05% in the past three months. Mutual funds advisors are of the opinion that the schemes are going to perform exceedingly well in the future.
- Stocks that could Generate Profits
For creating a well-planned portfolio, the experts are recommending to include 30 to 40 percent of your funds in stocks. The rapid rise of COVID-19 has resulted in uncertainty in the stock market.
However, there is hope if one focuses on large-cap names that have a strong balance sheet and the capability to survive the crisis. Stock market experts recommend investing in the stocks of pharmacy companies, top-performing banks, life insurance companies and personal hygiene product manufacturers that can promise healthy gains in the long term. The focus should be on building a strong portfolio.
- Investing in Large-Cap Funds
Investment experts believe that investing in large-cap fund schemes of large companies will benefit from their resilience despite the sluggish economy. Focusing on large-cap funds should be the theme going forward.
These are ideal for conservative investors who want to create wealth without taking too much risk. Opt for large companies that have established themselves as leaders in their respective fields. Think of major corporations that have a reputation in their industry. Large-cap funds fare better in comparison to small-cap and mid-cap stocks in the period of a market correction. These schemes are less volatile and risky and promise modest and safe returns.
- Real Estate is Super Reliable
It is no doubt that investment in real estate is one of the most stable investments you can ever make. The impact of the present crisis on capital markets is quite visible and has compelled the investors to turn to real estate.
As the property prices have fallen by 2-9 percent, this has resulted in an opportunity that homebuyers can cash in. The prices are going to get better in the coming months once the panic situation subsides.
With various schemes being rolled out by the government and with RBI slashing lending rates and offering moratorium, this is the right time to invest in the real estate market. Homebuyers can get a home loan at much lower interests now and use it as an investment in buying property.
Also, there is a strong possibility of repossessed properties gaining entry into the market in the coming few months. The banks would auction off such properties for recovering the outstanding loan amount. Properties are generally auctioned at 20-30 percent lower rates than the prevailing market rates.
Properties are being viewed as a safer bet that will hold its value even in an event of a downturn. If you are expecting a decent return in eight to ten years down the lane, then you need to focus on investing in a property. Buying commercial properties can also promise high rental yield.
Many individuals who haven’t been impacted financially due to the current pandemic are looking for safer investments to secure their future. Real estate seems to be a popular option because of obvious reasons.
Measures taken by the finance ministry in India and reduction in property prices have compelled investors to consider real estate now. Investors are refraining from risking their money in volatile investments. Gold, pharma funds, and investing in large caps can prove to be beneficial in the long run for the investors.
The real estate market especially has become lucrative because of the lowered home loan rates. Even several builders are offering incentives to lure investors and this has created a win-win situation for homebuyers. If you seek stability, then you can consider the above-mentioned options for investment post COVID-19.