Best Investment Strategy For Stocks

Are you trying to learn the best share market investment strategy to trade? There’re a lot of strategies out there that claim to provide the best return when employed, but one needs to be extra concerned before executing it in a real market.

What should be your best share market investment strategy depends on a few factors. The Best thing about Investing strategies is that they are very flexible.

So, let’s understand what factors traders need to keep in their minds while making or executing a trading strategy.

Factors Affecting Share Market Investment Strategy

Let’s start by thinking about the Indian Consumption story. As consumption pattern tells almost 50% of the success rate of your investment strategy. For this consumption pattern, let’s further deep dive into sub-factors of the same.

➤ Demographics of the population

➤ What are people’s spending habits?

The spending habits of people will have some benefits for some companies. Then, who would be these companies, and would you be getting any benefits by investing in these companies.

Let’s start with the demographics of India. As we all are very well aware of all of India’s speeches. India is a country of around 140 crore people. Now, let’s split the numbers of the population. There’s only 3% of this total population comes in the middle class. You might hear people saying they belong to the Lower middle or upper-middle class. All come into the middle class only. Now let’s understand the actual definition of the middle class.

Categorization of Class through Income

As per the per capita income level is up to $2 Dollar in a day i.e., Rs. 140 per day approx. then those people fall into the poor class. If your income comes in between $2 to $10 in a day then they would be treated as a lower-income group and those whose incomes fall between $10 to $20 per day are considered in the middle-class category.

Now as mentioned above only 3% of the total population is in the middle class i.e., roughly around 4 crore people. Now if we categorize class as per their income level. So, the people who lie in the poor category would fall into poor categories lifelong? The answer is “No“. Households that fall into poor category groups might shift to the low-class group, middle class, or so on. Now how this can be possible. It can be possible through:

  1. Education
  2. Globalization
  3. Mudra Loans ( Self-Employment)

Now if you go through a survey from 2001 to 2011. There’s a drop of 15 points in the poor class as they moved to the low-income group, which lead to an increase in the low-income groups by 14 points. Now, these low-income groups might shift to the middle class.

Now because of this shift we need to understand their spending pattern. How much an average Indian spends and on what? So, in 2013-14 the average spending per capita is Rs 52000 and has steadily increased and has gone up to Rs 77000 in 2017-2018.

Consumer Spending Categories

Now, where does this spending happened? This spending has contributed to many categories:

  1. Clothing and Footwear
  2. Health
  3. Education
  4. Communication
  5. Many and more.

So, if the expenditure has increased then we need to understand its an expense for people like us and at the same time benefits for some. Now, who is getting the benefit we will cover just below.

Companies Benefiting from Consumer Spendings

As of now, we all are aware that people are spending on fashion and accessories, health insurance, preventive insurance, entertainment. Then which would be the companies who would get higher incomes because of the increase in spending of the people.

Now for instance, if we talk about ourselves and take ourselves as normal investors, then it’s not that easily possible to know which all companies would be fitting into a theme. For that information, there’s a lot of information provided on the internet just search for the categories, and all popular companies in that category would come. You can also search for the same in the money-control website.

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