Why India will be your best ever investment

Why India?

The countries driving economic growth have been quietly shifting away from the west. Growth is now being driven by emerging countries. The BRIC countries (Brazil, Russia, India and China) have all seen rapid growth in their economies over the last few decades.

India has many gifts that will help it on its way to the top. A vast supply of young skilled workers pouring into industries such as tech. Already developed and fastly growing service and manufacturing industry will also aid its growth.

The middle class is growing and that’s always a positive sign. More disposable income means more money getting spent in the Indian economy boosting corporate profits.

Which of the BRIC countries?

India is the world’s biggest democracy. Unlike China, Indian companies face little worry of state interference. The stock market and the companies listed on it have the capacity for long-term growth.

The main issue with many emerging economies is corrupt government officials and power hungry politicians. Stock markets are more volatile than developed countries. This increased risk can put a lot of people off investing in emerging economies. Take Russia for example. It was a prosperous economy until recent years and now the war declared upon Ukraine has made that dream unlikely.

When will India become a leading country?

This one is about looking long-term, it’s not going to happen overnight. India still faces many challenges if it wants to compete with the USA. Ensuring the poorest in the country get uplifted in the economic growth is vital to be the biggest economy. A superpower always starts with a successful government and India will be no exception. The current government have done a fantastic job of transforming India but it must continue if it wants to compete.

The Indian economy is growing at a rate of around 7% per year. It has just overtaken the UK economy to be the 5th largest economy. The chief economist of Goldman Sachs Jim O’Neil reckons by 2050 India will be the biggest economy in the world and will remain there for decades. Investors are advised to take a long term approach with India. Markets are susceptible to bigger downturns than developed countries. India should make up a proportion of your portfolio but only a percentage that works for you. Click here to see how you could potentially structure your portfolio.

How to invest in India with as little risk as possible

As always, investing in a fund (a collection of numerous companies) within India will help provide your portfolio with diversification. Click here to read our article on the best Indian stocks and funds the team picked out. Making regular payments into Indian stocks/funds will also help mitigate risk. Dollar cost averaging your investment amount over a period of time that suits you is advised. Click here to learn about dollar cost averaging.