How should investors plan their portfolio strategy?
With the arrival of Union Budget 2025 in India, investors are preparing for potential volatility in the market. Budget announcements often bring changes in various sectors as industries react to the government’s fiscal policies and spending plans. In such a situation, investors need to plan their portfolio strategy wisely so that they can reduce risk and take advantage of opportunities.
Let us know in detail what are the strategies suggested by experts and which sectors can become key for investment in the coming financial year.
Portfolio diversification: A must-have step
Given the possible impact of Budget 2025, investors should diversify their portfolio. This strategy can help protect against market volatility. Shrikant Chauhan, Head of Equity Research, Kotak Securities, says that it is necessary to spread the portfolio across different sectors to deal with the volatility that may occur during the budget.
Chauhan says, “Instead of investing in just a few sectors, investors should diversify their portfolio. This will not only protect against potential losses, but also benefit from growth in other sectors.”
Anand Rathi Wealth Deputy CEO Firoz Aziz also emphasized adopting a long-term strategy. He advised investors to create a balanced portfolio across asset classes and market capitalization.According to Anand Rathi, CEO, 55% investment: In large-cap stocks, 22% investment: In mid-cap stocks, 23% investment: In small-cap stocks. Investing in sectors like infrastructure, construction, renewable energy, and rural development can be beneficial.
Sector-specific opportunities: Where to invest?
Experts believe that some key sectors are likely to get special support from the government in Budget 2025. The major sectors among these are:
Infrastructure: This sector can be strengthened by the government’s increasing infrastructure spending. The focus on large projects and smart city schemes is expected to drive growth in this sector.
Healthcare and Pharmaceuticals: Government investment in healthcare as well as research and development in the pharmaceutical sector can get a boost. This sector remains a major option for investment after COVID-19.
Educational Technology (Ed-Tech): This sector can grow rapidly due to government steps promoting digitalization of education.
Renewable Energy and Electric Vehicles (EVs): Keeping in mind environmental factors, the government can invest heavily in this sector. This can provide a huge opportunity for long-term investors.
Rural development: Schemes that improve infrastructure in rural areas, agricultural development, and promote entrepreneurship can take this sector forward.
Forecast strategies: Suggestions for investors:
To avoid sudden market changes during the budget, investors need to proceed in a planned manner.
Focus on potential government priorities:
Atul Parikh, CEO of Bigul, believes that investors should adjust their portfolios according to the government’s priorities.
Focus on fundamentally strong companies:
Investors should invest in companies that have strong fundamentals. This can protect against sudden market fluctuations after the budget.
Adopt a disciplined approach:
Akshat Garg, AVP, Choice Wealth, suggests that investors should re-evaluate their portfolios after the budget announcements. Avoid excessive investments in any sector and make gradual changes over time.
In brief of Investment Strategy for Budget 2025
Diversification: Spread your investments across different sectors and assets.
Focus on the long term: Take a long-term view and don’t get attracted by short-term fluctuations related to the budget.
Understand government priorities: Identify sectors that will benefit from budget announcements.
Maintain balance: Make balanced investments across large caps, mid caps, and small caps.
Stay updated on the latest information. Focus on financial markets and budget announcements.
Budget 2025 is an important economic event that can have a deep impact on various sectors. Investors need to manage their investments carefully at this time. By following expert advice on diversification, focusing on sector-specific opportunities, and adopting a balanced portfolio strategy, investors can not only reduce risks but also make the most of the opportunities that emerge in the market.