Zebu blog

Tag: Inflation Hedge

  • The Benefits of Commodity Trading in India

    Commodity trading is the buying and selling of physical goods, such as agricultural products, metals, and energy sources. In India, commodity trading has become increasingly popular in recent years, as investors look for new opportunities to diversify their portfolios and potentially generate higher returns.

    Here are a few of the key benefits of commodity trading in India:
    Diversification: One of the primary benefits of commodity trading is that it allows investors to diversify their portfolios. By including commodities in their portfolio, investors can reduce their exposure to traditional asset classes such as stocks and bonds, which can help to reduce overall portfolio risk. This is particularly important in today’s volatile economic environment, as diversification can help to protect against market downturns and minimize the impact of any individual investment on an investor’s overall portfolio performance.

    Potential for higher returns: Commodities can be an attractive investment option for investors who are looking for the potential for higher returns. Many commodities, such as gold and oil, have historically performed well during times of economic uncertainty and market volatility, which can make them a good choice for investors who are seeking to protect their wealth. In addition, commodities can offer attractive risk-reward profiles, as their prices tend to be more closely tied to underlying supply and demand dynamics than other asset classes.

    Inflation hedge: Commodities are also often seen as a good way to hedge against inflation, as their prices tend to rise when the cost of living increases. This can make them an attractive investment option for investors who are looking to protect their purchasing power over the long term. For example, gold has traditionally been viewed as a safe haven asset that can protect against inflation, as its value tends to increase when the purchasing power of other currencies declines.

    Liquidity: Commodities are typically highly liquid, which means that they can be easily bought and sold on the open market. This can make them a good choice for investors who need to quickly access their funds or who are looking to actively manage their portfolios. In addition, liquidity can be particularly important in times of market stress, as it allows investors to easily buy or sell their investments as needed.

    Regulation: In India, commodity trading is regulated by the Securities and Exchange Board of India (SEBI), which ensures that the market is transparent and fair for all participants. This can give investors confidence that their investments are being handled in a professional and trustworthy manner. In addition, regulation can help to protect investors against fraud and other forms of misconduct, which can be a concern in some less regulated markets.

    Potential for price appreciation: Finally, one of the main benefits of commodity trading is the potential for price appreciation. Commodities are physical goods that can be subject to price fluctuations based on changes in supply and demand, and these fluctuations can create opportunities for investors to profit from price movements. For example, if an investor believes that the price of a particular commodity is undervalued, they may buy that commodity in the hopes that its price will eventually rise.

    In conclusion, commodity trading can offer a number of benefits for investors in India, including diversification, the potential for higher returns, protection against inflation, liquidity, regulation, and the potential for price appreciation. By including commodities in their portfolios, investors can potentially reduce risk, generate higher returns, and protect their wealth over the long term.

  • How to Invest in the Stock Market During Inflation

    The economy is always changing, and it can be hard to make investments when things are always changing. Investors are having a hard time right now because the economy is showing all the signs of inflation. So, how do investors invest now, especially if they want to put their money in the stock market?

    Are you planning to invest in the stock market? If yes, then you should definitely try Zebu’s online trading platform which will help you manage your trading seamlessly. At Zebu, a share market brokerage firm we also understand that online brokerage is a major problem, hence offer lowest brokerage options to our customers

    With higher rates of inflation, the IPOs of startups going public are becoming an ever more appealing way to get people to invest. But it’s worth going back in time to get a better idea of how the economy worked in the past. The last 10 years, from 2011 to 2020, had low inflation and moderate growth. During the first decade, especially from 2002 to 2007, growth was higher, but inflation went up.

    We are at a time when growth is slow and prices are going up fast. There is a lot of uncertainty in the world today, and rising geopolitical tension is making it worse. But even though the markets have recently gone down, starting prices are still high. If you want to trade stocks when inflation is high, you can, but you should be careful.

    How the Indian economy is doing

    The Indian economy is in a macro situation right now, which can hurt most emerging markets. Many countries with “emerging markets” (some of which are closer to India than others) are in economic trouble. Because of this, FIIs are pulling their money out of these markets. Since October 2021, this has been the case with India. Still, India is better off than other countries in the same situation when it comes to inflation. This is one of the most optimistic signs for investors.

    Using Investor Awareness to Trade on the Stock Market

    Why is India a good market for investments, even if they are in the stock market? For one thing, India’s economy is back on track after all the problems of the past few years. The services sector, which has been slowing down for the past few years, is also showing signs of getting back on its feet. Also, the amount of debt owed to countries outside of Canada is low, and the country has enough foreign exchange reserves to cover CAD projections and debt payments to countries outside of Canada. In this situation, investors who buy stocks need to be careful, because investing in the markets is risky. Investors who want to open a Demat account and invest in stocks that will do well during times of inflation should keep in mind the following:

    Investors should be ready for more volatility for the next 6 to 9 months.

    Investors shouldn’t expect big returns and shouldn’t think that the returns of the last two years will happen again.
    If an investor wants to invest a large sum all at once, they can choose funds that have a balanced mix of debt and stocks.
    Hybrid funds are a good choice for investors who like to play it safe.
    Using an STP or SIP, you should spread out your investments in small and mid-cap stocks over the next 6 to 9 months.

    A Time to Invest Carefully

    You might be interested in investing in the stock market because there are a lot of IPOs coming up. It’s easy to open a Demat account and start investing with Zebu, but if you do so now, you must do your research on stocks and invest carefully.

    If you planning to invest in the stock market then you should definitely try Zebu’s online trading platform which will help you manage your trading seamlessly. At Zebu, a share broker firm we also understand that online brokerage is a major problem, hence offer the lowest brokerage options to our customers

  • Here are some reasons why you should buy dividend growth stocks

    Some stocks pay you just to hold them. Stocks that pay dividends can be a good way to make money without doing anything. They can also protect you from inflation.

    “Buy low, sell high” is a phrase that is often used to describe a good way to trade stocks. But investors can also make money on the market by getting dividends.

    Dividends, in short, are a way for companies to share some of their profits with their investors. Shareholders benefit because each share of stock they own gives them the right to a set dividend payment. Companies give out dividends on a regular basis, usually monthly, quarterly, or annually. Dividends can be paid out in cash or in the form of more company stock. Because of this, you can almost think of stocks that pay dividends as a way to make money while you sleep.

    Growing dividends from good companies can make a big difference in a portfolio and reinvested dividends are a much bigger source of growth than market returns alone.

    Dividend-paying stocks have been getting a lot of attention lately because they do more than just give you a steady stream of income. They also protect your money from inflation, which makes them perfect for the current market.

    How stocks that pay dividends protect against inflation

    In an inflationary environment, it’s good for big companies that have a long history of paying consistent dividends every year because they can handle higher prices and even benefit from them. As inflation causes prices of goods and services to rise, a company’s revenue, earnings, and dividends will also rise.

    Looking for a portfolio of stocks with strong cash flows that yield an average of 3% to 4% or more and consistently grow dividends by 5% to 10% each year. These are the kinds of businesses that investors should go after. Many companies with high-dividend stocks have used business models for a long time that work well when prices go up, which helps them make money in the long run.

    People still have to heat (or cool) their homes, drive to work, and eat, even when prices are going up quickly. Generally, companies in the energy, natural resources, and food and consumer staples sectors have strong pricing power and cost management, which lets them raise prices, keep demand up, and make more money.

    What investors need to remember

    Beginner investors should definitely buy stocks with dividend growth, but they should be careful when making investment decisions.

    Portfolio rebalancing, which is reacting to events as they happen in real-time, can be pricey when inflation is going up. Inflation pressures have been growing for a while, and the prices of many high-dividend stocks already reflect this.

    In general, the best idea is to think long-term, try to build a diversified portfolio of holdings, and resist the urge to try to time the market and shop around.