Investors’ Delicate Dilemma !
Yes, Investors across the country particularly those in Stock Markets, are rather flabbergasted to come to any conclusion. They are confused-some remain silent and some still active-get their fingers burnt! The candid reason being that the Economy as a whole- world over and more particularly Indian Economy is undergoing one of the worst phases owing to multifarious factors, each adequately contributing for this remorseful state of the economy. Auto sector- demand for vehicles- a key indicator of the health of the economy is much to be desired. Retail consumption and demand curve are moving southwards. Shops are getting closed or at least phased out. IMF, World Bank, JP Morgan, SBI, Citi Group, Nomura and many others are painting not a rosy picture about the growth- read it as GDP-and growth forecasts are shrieking- dwindles to less than 5 %.
IIP index is also down. Diesel, Power, Coal demand/production low. How long this uncertainty would persist? The US- China Trade war is another issue to be factored in.
The stock market being a barometer of the state of the Economy fortunately is not much impacted as feared earlier. There is a dichotomy. It is a classic conundrum . In fact the markets have been quite resilient although a few ups and downs are inevitable. Nifty remains at 1.5 % i.e 200 Points away from its all time high. Sensex has already raced past its previous highs.
Credit Suisse in a recent report found that nearly 70 percent of BSE 500 stocks are more than 20 percent below their peaks, 60 percent are 30 percent from the peaks and just 67 are at or near all-time highs.
The questions to be pondered over are as below:
- Whether the International Economy will show signs of recovery-particularly top 5 ?
- What about the oil prices- will it stabiles or go up ?
- The Trade wars – will they be abated or get escalated?
- For India-will the Fiscal deficit be contained or escalate?
- The measures of the Govt-Will they propel a dynamic growth and if so when or how soon?
- The ease of doing business – has it really percolated to the ground?
- The high cost of fuel and other essential commodities- will they lead to less investment?
- The taxation structure- will it provide some relief to the investors?
- The ROI on traditional modes of investments in Banks, NBFCs, Chit, Coop. banks- Safe & Profitable? Better than the inflation ?
- India was at one time, the highest per capita saving country.. Why has it lost its glitter?
These are the issue plaguing the perception of the average Indian Investors as at present.
What should an Investor do in such a state of predicament or dilemma?
- Invest in Stocks which have proven track record– be it I.T, Retail, Pharma, Auto, Banks……
- Invest some amount in land, gold, Insurance etc to the extent one may need.
Then watch and enjoy the market movements keeping fingers crossed without involving or sacrificing your sleep and instead wait for clarity in the Financial and economical climate to emerge to take big and decisive resolutions to invest safely and profitably. Till then Good bye !
For all your Investment advice, your Goodwill is just away from you by a call !