All is well in 2013

Contrary to expectations, stock markets outperformed all other investment avenues in 2012. The benchmark indices, Sensex and Nifty jumped more than 25% and 27% respectively during this period. Realty prices in Ahmedabad appreciated by up to 14% during the year.

Interestingly, gold and silver, which gave the lowest returns on investment, saw maximum investment in the year. Prices of both precious metals climbed up in the range between 12% and 13%. They also saw huge rise in sales in terms of value.

So, what the New Year holds for investors? Where should they look to deposit their hard-earned money to gain the most?

There is every reason for investors to feel happy about. Experts believe that year 2013 will be a year of growth in all avenues. They have also singled out bullion which is likely to shine brighter than other investment options. Equity and realty are likely to grow at a similar pace to 2012.

The New Year offers better visibility as the government has been successful in changing the political agenda from corruption stories to reform discourse, believe pundis.

“All components of the economy such as agriculture, manufacturing and services have ample opportunities to look forward to in 2013. Expect the optimism to be reflected in the market. While 2013 starts on a better note than 2012, investors must avoid the temptation to extrapolate better news on the economy to the entire market. A section of the market that was afflicted with business cycle challenges will have the opportunity to regain its old glory,” said Dinesh Thakkar, CMD, Angel Broking.

The worries in Western world may have negative impact on stock markets, fears MD & CEO of Dhanvarsha Fincap, Nilesh Kotak. “We expect that in 2013 market will see huge movements and it is advisable to take stock specific approach, because world economy is not in the good shape,” he said.

Equity markets gave stunning return of around 25% but were not on retail investors’ radar. The end of 2011 was bad for stocks as almost every third scrip fell to 52-week-low. This kept investors away from equities.

But in 2012, despite scams, delayed rains and fear from western countries, markets gave better returns, thanks to renaissance at the Centre. By the end of the session on Monday, Sensex closed at 19426.17 and Nifty closed at 5,905.1 points.

Till Diwali 2012, gold was shining the most compared to all other investment avenues. But in last 45 days, several events took place in Western world, which pulled down the gold prices in international market.

It led to fall of gold prices almost by Rs2,000 per 10 gram in last one and half month. Silver prices jumped Rs4,000 per kg in same period. With rise of over 12% in the year, gold closed at Rs30,435 per 10 gram on Monday. While the last trading price of silver was Rs57,740 per kg.

Gold have touched new highs in Indian bullion markets but not globally, said bullion trader and analyst, Girish Choksi. “There are several concerns in US and European countries which may depreciate their currency. As a result, people will jump on safe heaven, gold. At that time, gold will start climbing towards new peak in international market. In case of domestic market, I am expecting gold to touch Rs35,000 per 10 gram in 2013,” he said.

If you are investing with a long term view of at least two years, silver may be a good option, suggests, Manoj Soni of AB Jewels.

“Compared to gold, silver may not give better returns in 2013. Globally, there is sufficient silver to cater to demand. Only speculations can change the equations. I am not expecting silver to see new high in domestic market in 2013,” he said.

In case of real estate, the appreciation of up to 14% in prices was due to rise in input costs. However, the realtors offered freebies, discounts and other schemes to lure investors. But most of end users had shown interest in buying properties.

“Affordable segment witnessed demand in 2012 and first half of 2013 will also witness demand in this category. Developers get good response during festival season. Industry expect surge in demand after June 2013 in all segments provided the state government comes up with policy decisions which will ultimately help the end users,” said Dipak Patel, vice president, Gihed.