We are on the threshold of 2025 and ready to welcome the new year. With the change of year, new trends in the financial market are taking shape. In such a situation, this is the right time to understand the opportunities available in the new year. Whether you are an experienced investor or just starting out, the ways of investing that were beneficial in 2024 may not necessarily prove to be equally effective in 2025. However, some trends of this year can provide valuable information for 2025. By understanding some megatrends of 2025, you can get a financial edge at the beginning of the year itself. There will be many opportunities in the new year, from investing in index funds to considering traditional insurance and finding suitable liquid funds. Also invest some in gold for stability in the portfolio. Let’s consider five megatrends of the new year… Index funds have low cost, more stability
In the bull market of 2024, investors invested heavily in equity-oriented growth schemes. Under this, AUM grew 49% to Rs 30 lakh crore. The 73% growth in multi-cap funds shows that investors want diversification. The 42% growth in flexi-cap funds gave fund managers flexibility in volatile markets. But the real star was the index fund. Their AUM grew 82% to over Rs 1 lakh crore. Investors are shifting to passive strategies for low fees, discipline and long-term gains. That is, they are maturing. Passive investment is no longer just an option; it is becoming the norm. Insurance is protection, not an investment tool. Interest in buying insurance for investment is decreasing among Indians. Now people are looking at investment and protection separately. They have started understanding that insurance is not a tool for wealth creation, but protection. Traditional endowment policies and unit linked plans (ULIPs), once considered an integral part of investment portfolio and tax planning, are now losing attraction. The new tax regime also has a big hand in this. Deduction on life insurance premium has been abolished. According to a survey, only 37% of salaried people invested in insurance linked products in 2024. This figure was 46% in 2022. Investing directly in equity is risky
Managing a stock portfolio is a bit more difficult. Given the dynamics of the stock market, it can be difficult to decide when to buy, hold or sell what. Looking at the returns after paying tax from investing directly in equity (stock market), many people find investing in passive index funds right. Many investors have started to realize that perhaps the returns for investing directly in equity are not worth the time and stress. If you are also getting upset by investing directly in equity, then it may be time to change the strategy and adopt a more practical approach. Liquid funds are better for stable returns
The facility of redemption at any time and more tax efficiency than FD is making liquid funds popular. While TDS is levied on an annual basis in FD, tax is levied only on redemption in debt funds. This feature makes them an attractive option for those seeking stable returns. This is the reason why 7 out of the top-8 debt funds in the country are liquid funds. Investing in gold can increase returns
In 2024, from retail investors to central banks around the world, everyone bought gold in large numbers. This year gold gave a return of more than 20%. This trend is expected to continue in 2025 as well. Gold is a safe investment in times of inflation and uncertainty. Keeping gold in your portfolio according to your risk capacity is a smart move. There may be an opportunity to buy it even if the price falls slightly.
