How to invest wisely in 2024?

There is no doubt that 2023 was a great year for the Indian stock market as new records were set in the frontier indices. Nifty50 crossed the 19,000 mark in June and reached 20,000 in September. It soared above 21,000 points on December 8th, and then hit a new all-time high of 21,492 points in five trading sessions. Similarly, the S&P BSE Sensex also recorded unprecedented heights, in June he crossed the 64,000 level and in July he reached the 67,000 level. In November and December, the index experienced a significant increase of 7,731 points, reaching 71,605 points. Overall, Nifty 50 and S&P BSE Sensex rose 18.30% and 17.22% respectively. Small and mid-cap stocks overtook large-cap stocks, delivering impressive returns of 48.06% and 39.72%, respectively.

But should we rely on the revenues generated in the coming 2023? What mistakes should we avoid? Entrepreneur India speaks to financial giants on how to invest wisely in 2024 Did. Here are their opinions:

Radhika Gupta, MD & CEO, Edelweiss Mutual Fund

expect a realistic return

2023 was an amazing bull market year. The market hit new highs. The 30-share BSE benchmark Sensex crossed 71,000, while the broader NSE’s Nifty crossed the 21,000 mark. We find that people often get carried away in such scenarios. Seeing a bull market, they increase their risk appetite, choose products they don’t understand, and change their asset allocation. In 2024, the key lesson for the general public is to not be influenced by the past year’s returns. Instead, stick to your asset allocation and keep realistic expectations.

Anthony Heredia, MD & CEO, Mahindra Manulife Mutual Fund, AMFI Vice Chairman

invest for the long term

The key to successful investing in 2024 is to maintain diversification and stay invested for the long term, at least five years. Investors tend to make choices influenced by recent returns, which often end in disappointment. In some cases, you may benefit from choosing the opposite path. For example, returns on bond funds may not be very promising from the perspective of the past year or two, but they may be more promising over the long term given where interest rates are likely to go in the future. A smart choice would be to buy bond funds or high-quality long-term deposits. Products that combine all of these, such as multi-asset funds, will be the best option for investors in 2024.

Rahul Singh, CIO – Tata Asset Management, Equities Division

Be optimistic but cautious

Reflecting market trends in 2023, a smart approach to investing in 2024 involves a judicious blend of caution and optimism. The bullish trend seen in 2023, driven by the investment cycle and manufacturing recovery, suggests a positive outlook for the overall market next year. However, after the impressive rally, it is important for investors to be mindful of the possibility of a correction, with some consolidation expected in the next six months, especially in the small- and mid-cap sector. A diversified portfolio focused on cyclical sectors such as banking, infrastructure, power, manufacturing and capital goods may be prudent.

Lakshmi Iyer, CEO, Investments and Strategy, Kotak Alternate Asset Managers Ltd

Avoid driving backwards

The past year’s returns for small- and mid-cap stocks in particular have looked exemplary, and the momentum may not continue. Be aware of the pitfalls and don’t give in to greed. 2023 was also a happy year not only for physical assets such as gold, but also for financial asset classes. You should continue to focus on asset allocation and using asset classes for their intended purpose. A rate cut in 2024 could lead to potential capital appreciation rather than just the carry investors have earned so far, so they may consider adding duration to their bond portfolios.

Mr. BHARAT PAREEK, Head of PWM Products and Segment, ICCI Securities

Invest consistently, be disciplined, and be patient.

In the world of investing, consistency, discipline, and patience are important virtues for success. 2023 shows that the market can be very volatile and in such times he says investing through SIPs will help in creating a long-term portfolio. SIP brings consistency and discipline with the added benefit of rupee cost averaging. It’s better to build a portfolio consistently than to wait for a sudden correction and invest large sums of money. For example, many political analysts expected a tough victory for the Bharatiya Janata Party in the recent state elections. However, it turned out that the BJP won by a huge margin, triggering a market rebound. If investors sit on the sidelines hoping for a post-election correction, they will miss out on the 12-15% returns the market can deliver in a very short period of time.

ANIL GHELANAI, Head of Passive Investments and Products, DSP Mutual Funds

Invest in longer term bonds

In the second week of December, RBI MPC kept the repo rate unchanged for the fifth consecutive time. A few days later, similar results were obtained in the United States. The US Federal Reserve has left interest rates unchanged and has shifted to a very dovish outlook, predicting a 75 basis point cut in 2024. The rate cuts and “loan monetary policy” planned for the US in 2024 could be a major trigger for rate cuts in India as well. This has focused attention on investing in the fixed income sector. Bond yields are currently at multi-year highs, potentially making bond funds even more attractive. You can invest in longer-term bonds and mutual funds that can provide greater returns in the declining interest rate scenario that unfolds during 2024.