Where to Invest in 2022

Covid-19 made investors shift to riskier assets for higher returns in 2021. Here’s what to expect from different asset classes in 2022.

- Avneet Kaur

THE YEAR 2021, hit by the worst of Covid-19, ended unexpectedly well for financial market investors.One reason was pick-up in GDP growth after the sharp dip in early part of 2020. While global economic growth is recovering, India will occupy the title of one of the fastest-growing economies, says Nilesh Shah, Group President & MD, Kotak Mahindra AMC. Real GDP growth is expected to be 9.5% in FY2022 due to lower base and bounce-back by businesses after progressive reopening of the economy. GDP had shrunk 7.3% in FY2021. Nineteen of the 22 high-frequency economic indicators such as index of industrial production are in the positive territory. Taking the cue, Indian stock markets did extremely well for a major part of 2021. The weight of Indian listed companies that are part of the MSCI Emerging Market Index rose from 8% in 2020 to 12% in 2021. Such hearty macro and micro indicators and decent capital market gains are great for investors. So, which asset class will give blockbuster returns in 2022?

It is tough to choose. Apart from traditional investment options such as equities, debt, real estate and gold, the digital boom during the pandemic has amplified retail investors’ interest in asset classes like peer-to-peer (P2P) lending, cryptocurrencies and Real Estate Investment Trusts (REITs). Here’s how these assets may move in 2022.

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