As investors, we are always looking for the next big market.
It was Japan post-World War II, China in the 90s and early-2000s, and Southeast Asia after the last recession.
Japan’s hype has long subsided. But the other two markets should continue to expand at robust rates.
Nonetheless, it is time to look beyond them. They are flush with investment capital and won’t deliver the kinds of returns they did in the early days of their rises.
Fortunately, I have the next big market in sight.
These Population Figures Make India Unique
The next big market will be India.
It is currently the world’s fifth-largest economy. Projections, however, indicate that it will surpass Germany as the fourth-largest economy within the next five years.
By 2030, India’s economy will be bigger than Japan’s. In about four decades, it will surpass the United States.
It’s easy to understand how this meteoric rise will happen.
Five years from now, India will be the most populous country on Earth. It will reach its peak population in 2070.
Moreover, the country enjoys an ideal population structure.
As you can see, India boasts a large youth population, the largest in the world. That’s an important factor to consider when shopping investment markets. It means the country has a fresh supply of labor and, as well, that it doesn’t have to worry about pension and health care obligations dragging down its economy.
In addition, India is the world’s biggest supplier of university graduates. The majority of these are IT professionals and engineers, meaning India is farming labor for two of the most important global industries.
India is already profiting from its remarkable population situation, with its economy growing at about 7% per year.
I think it will carry this momentum through the 2020s and beyond.
Meaning, this is the right time to invest.
I’ve selected the following three stocks, which will all benefit from this country’s impressive growth potential.
Profit From India’s Vast IT Talent Pool With Infosys (NYSE: INFY) And Wipro (NYSE: WIT)
Infosys and Wipro are direct competitors, so I include them together.
Both provide consulting and IT services worldwide, employing about 200,000 people apiece.
The reason I like India’s top IT companies is that they attract the best graduates from the country’s extremely competitive talent pool.
That is how Infosys and Wipro can compete on the world stage with the likes of IBM, Accenture, and Cognizant Technologies.
Considering that India will continue to produce the best IT professionals in the world, both Infosys and Wipro look like exciting investment options.
Unbanked And Rising Middle Class Population Offers Opportunity For HDFC Bank (NYSE: HDB)
HDFC Bank is one of India’s largest non-government-owned banks and one of the largest companies in the country.
The reason I like this stock is that India has a large underbanked and unbanked population.
In 2017, 20% of this country’s population didn’t have a bank account. Three years prior, that number was 47%.
Moreover, the demand for financial services will expand thanks to the rising middle-class population. All India’s growing middle class is looking for vehicle financing, mortgages, personal loans, and so on. These bank revenue sources, which are common in developed countries, are only beginning to take hold in India.
Given HDFC’s robust market share among India’s middle class, the bank should do well in the years to come.