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  • Sep 20, 2022 - 5 Sectors for a 10-Year Bet. Here's All You Need to Know

5 Sectors for a 10-Year Bet. Here's All You Need to Know

Sep 20, 2022

5 Sectors for a 10-Year Bet. Here's All You Need to Know

The Indian economy is growing rapidly again after the shock of covid.

Companies have cut debt, started hiring, are expanding capacities, and exploring new opportunities.

This is good news for the stock market, especially in the long-term. Investors who identify the right long term investing opportunities will make a lot of money.

But this brings up the most obvious question of selecting the right investments.

How can you identify which industries and companies will do well in the long term and which ones will struggle? After all, no one has seen the future.

Well, in this editorial we will attempt to light the way for serious long term investors. We will dive into the exciting money-making possibilities the Indian economy has in store for us.

Specifically, let's look at 5 sectors that we expect will do very well over the next 10 years.

#1 Real Estate

India is getting wealthier at an ever increasing rate. People are demanding premium, comfortable living spaces. Not to mention second homes and vacation homes.

One needs to only look to China's massive real estate boom to understand the long-term potential of real estate in India.

We believe, real estate companies that pivot from low-income housing to premium housing will do very well.

Another niche segment that will do well is senior housing.

India will overtake China as the most populous nation in a few years. With each passing year, our large population will not only get wealthier but also older. Many people want to live in a comfortable place after retirement far away from big cities.

That will open up a huge opportunity in the senior housing segment. Companies focused on this niche have a massive tailwind going for them which will last several decades.

If you're looking for a 10-year investment, this is a space to seriously consider.

#2 High-End Consumer Retail

India's growing population which is also getting richer has already begun spending more on products that are 'classy' as opposed to 'trendy'.

Trends are all the rage among India's youth in college. But that's not the case for young adults with disposable income. Premium products that cater to specific needs of discerning customers is slowly but surely taking centre stage in the Indian retain sector.

Consumer brands - fashion, electronics, accessories - that recognise this shift will develop a base of loyal premium customers. These companies will dominate the retail sector over the next 10 years and beyond in India.

On the other hand, brands that continue to focus on the youth and/or low-income segment, will struggle to grow their profits. They will face increasing competition in a market that is not growing as fast as before.

So for a high-conviction long-term investment, look to the most dominant brands in the consumer space. You will probably not go wrong with this theme.

#3 Travel & Tourism

This will be a huge growth industry in India's future. Covid-19 will seem like a distant memory when people begin spending big money on luxury vacations.

This is something that might seem like an alien concept for many investors today. After all, we think only rich people go on luxury vacations. It's hard for most Indians to imagine a middle class family going on a luxury cruise.

But there is nothing unusual about this. It happens all the time in the developed world. One only needs to look at the spending patterns of people in richer countries to see how this will play out in India.

Of particular interest to investors should be companies that are going the extra mile to deliver customised experiences for travellers.

Plain vanilla tourism will soon be a thing of the past in India. That day will come sooner than you think.

If you're looking for a great 10-year investment, then take a hard look at customised travel and tourism. You might find a 100-bagger here.

#4 Technology

This one is obvious but very important. Everyone can see the growth of India's tech startups.

Don't limit yourself to the IT sector. Today, the tech sector in India is dominated by IT services firms. Think Infosys, TCS, and the like.

However, India's tech sector 10 years from now will look different. The big IT services firms will likely still be around of course. But they will face huge competition from a growing number of newer companies.

These companies are just startups today. As you read this, promoters of these startups are still worried about getting investors to back their vision.

But some of them will make it past the initial growth stage. And a few of them will inevitably become world leaders in their niche.

Long-term investors in these companies will become very wealthy indeed.

#5 Healthcare

The younger the population, the healthier it is, on average, assuming that infants are taken care of.

But as a nation gets older, the healthcare needs of its population goes up. The older we become, the more we depend on the pharma industry.

Just look at the gigantic size of the healthcare sector in the developed world. That will tell you all you need to know about the wealth creation potential of these companies. The best pharma stocks in India should be where your search begins.

As India gets richer, it's population will also get older. 10 years from now investors will be jumping on the healthcare theme in a big way as it caters to a population that would have just begun aging and would have disposable income to spend their wellbeing.

Covid-19 may have brought these firms into the spotlight but they have a very bright long-term future as well. It's just a matter of finding the right stock and holding on to it.

Well, this was a list of the top 5 sectors we think can produce excellent 10-year investments. We hope this editorial has triggered your curiosity to dig deeper and find the best long-term stocks.

Happy investing!

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...

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