We are on the threshold of 2025 and ready to welcome the new year. Over the years, new trends are emerging in the financial market. In such a situation, it is the right time to understand the opportunities available in the new year. Whether you’re an experienced investor or a beginner, the investing methods that worked in 2024 won’t necessarily work as well in 2025.
However, some of this year’s trends could provide valuable insights for 2025. By understanding some of the 2025 megatrends, you can gain a financial advantage early in the year. There will be many opportunities in the new year, from investing in index funds to traditional insurance and finding suitable liquid funds. Also invest money in gold to ensure stability in your portfolio. Let’s consider the five megatrends of the new year…
Lower cost, more stability in index funds During the 2024 bull market, investors invested heavily in equity-focused growth schemes. As part of this, assets under management increased by 49% to Rs 30 lakh crore. The 73% growth of multi-cap funds shows that investors want to diversify.
The 42% growth in flexi-cap funds has given fund managers flexibility in volatile markets. But the real star was the index fund. Their AUM increased by 82% to Rs 1 lakh crore. Investors are turning to low fees, disciplined and passive strategies to achieve long-term profits. This means they are maturing. Passive investing is no longer just an option; This is becoming the norm.
Insurance is protection, not an investment vehicle. Interest in buying insurance for investing is decreasing among Indians. Today, people think about investment and security separately. They began to understand that insurance is not a means of wealth creation but a means of protection. Traditional endowment policies and unit linked plans (ULIPs), once considered an integral part of investment portfolio and tax planning, are now losing their appeal.
The new tax regime also plays an important role in this regard. The deduction on life insurance premiums has been abolished. According to a survey, only 37% of employees invested in insurance-related products in 2024. In 2022, this figure was 46%.
Investing directly in stocks is risky Managing a stock portfolio is a little more difficult. Given the dynamics of the stock market, it can be difficult to decide when to buy, hold or sell. Given the after-tax returns of direct equity (share market) investments, many people find investing in passive index funds a good idea.
Many investors are beginning to realize that returns may not be commensurate with the time and stress involved in investing directly in stocks. If you too are having difficulty investing directly in stocks, it may be time to change your strategy and take a more practical approach.
Liquid funds are better for stable returns Convenience of redemption at any time and greater tax efficiency than FDs make liquid funds popular. While in FDs, TDS is levied on an annual basis, in debt funds, the tax is levied only at the time of redemption. This feature makes it an attractive option for those looking for stable returns. This is the reason why 7 of the top 8 debt funds in the country are liquid funds.
Returns can increase by investing in gold In 2024, retail investors and central banks around the world purchased gold en masse. This year, gold has returned 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 is a wise decision depending on your risk appetite. There may be an opportunity to buy it even if the price drops slightly.