As the economy rebounds, here are four investment themes you should keep in mind while investing in 2022.
2021 was an eventful year for investors.
As low-interest rates made traditional investment avenues, such as fixed deposits and debt instruments, less attractive, investors looked at other avenues such as the stock market to earn inflation-proof returns.
And earn, they did.
Despite the pandemic, stocks rallied over 100%. Some even rallied more.
Governments around the world pumped liquidity into the system to help their struggling economies. This liquidity found its way into the stock market.
Would investors encounter the same kind of luck in 2022?
With the Fed easing its bond purchases any time this month, the liquidity from the market could start disappearing soon. FIIs have already started booking profits.
So, what should you do, dear investor?
Where should you put your money in 2022?
Here are four investment themes you could consider.
#1 Technology led growth stocks
Technology-led stocks dominated the market in 2021 as the pandemic caused billions of people to go under lockdown and meet virtually instead.
Cloud computing proved to be the clear winner. It quickly became the primary infrastructure for millions of people having to work and learn from home.
The surge in demand for cloud software led to big returns, and large IT players such as Infosys and TCS cashed in on the newfound demand.
Other technologies that made the shift possible were e-commerce, digital payments, artificial intelligence, 5G wireless and videoconferencing.
Also, part of the trend was the Internet of Things, a technology used to create smart digital devices. The technology helped create better experiences for people as they adjusted to a new reality.
While lockdown restrictions have been eased and an economic recovery is on the way, these trends are expected to continue in the year 2022 as well.
The adoption of new technology will not be limited to IT companies alone but will also include companies that have made the decision to adapt and innovate with the times.
To take advantage of this technology-led growth you could consider investing in companies that have transformed their business using technology and are poised for growth in the coming years.