Lesson # 10 : Dip Proof Sectors

There are certain sectors which are market proof. That is irrespective of the market fall or rise these sectors are bound to give returns and that too at continuous intervals.

The sectors are:

Power: In an economy where power is erratic and the government has decided to privatize the distribution of power this sector is headed in the upward direction. Moreover, with newer forms of power being generated in the form of hydro electric power, solar power etc. this sector is bound to give positive results. Moreover, the Government plans to remove the subsidy that it is offering to the citizens which would mean higher prices of electricity which in turn would result in higher profits. Thus, greater increase in values of stocks.

Banks: As long as the markets prevail so will the banking system and even if the markets don’t the banking system would still prevail. With banks making huge profits as a result of the large number of loans that they are offering and the increasing credit card users the sector is aimed to generate some of the highest returns in the economy. An investor is strongly advised to invest in Government Institutions as the chances of the stock falling in that case are almost negligent.

Fertilisers: In an economy which is roughly 50-60% agrarian in nature it shouldn’t come as surprise that fertiliser companies are bound to do well. Also understand the fact that these companies may have relatively lower margins but since they have a relatively larger consumer base it results in greater revenue each year and therefore higher profits and greater dividends. A sector where most of the stocks are relatively highly priced this is one of the best sectors to invest in.

Fortune 500 Companies: The magazine fortune annually comes up with a list of the top 500 companies in the world. If an individual invests in one of these companies the results are assured and guaranteed. The main reason behind this is the fact that a lot of research is put into this list. Fewer than 10 Indian companies feature on this list and as the choice is limited the investment amount can be diverted depending upon individual needs.

Happy Investing

Udit Sabharwal {On behalf of Doodle inc}