November 19, 2019
3 Aug 2019
“I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.” – Warren Buffett
A coin will always have two sides to it – head and tail. What you choose when tossed, depends upon your assessment of the coin. Similarly economy at any point of time will have both optimism and pessimism prevailing at the same time. Some factors will indicate optimism and some others pessimism. Like many agencies have forecasted lower growth rates for GDP that fuels the notion if the economy is going into recession. Opposite this was a data released by central board of direct taxes on advance tax collected this June. It was 133% more than that was collected for first quarter of 2018-19. This boasts of very healthy recovery on corporate side.
World over traditional business systems are going through tough times. We are moving from traditional way of living to tech oriented life, living virtually more than in reality. The way we live is undergoing transformation and so are the business models. We are in transition phase. It happened during industrial revolution when man moved from hard labour to mechanized machines and now moving life to living on internet. It has gone to the extent that we see growth of our child online than appreciate it physically.
At the same time the way governments are conducting their business is also changing very fast. Governments world over are adopting new regulations to keep pace with new technological changes and challenges and to take care of requirements of their own country under changing environment. The world order is changing fast and new power centers and colonies are being developed.
During such period of transition some pain will always be felt in terms of such companies who will take time to change and adopt to new technologies & regulations, may vanish and those who pioneer or adopt such technology at very early stage & also are regulatory compliant will be new darlings of the market.
*What an investor should do –* Present are the times when an investor realizes the benefits from use of different of asset classes and diversification in his portfolio. In our post budget communication we have said that Nifty may breach 11,200 and may even touch 10,800. It’s almost there. Both Nifty and Sensex are down by over 8% from their peaks, midcap index are down by over 15% and small cap index are down by over 25%.
Have we reached bottom, we don’t know. What we know is that these are quite good levels if not attractive and one must start putting in some money in equity. Don’t forget the mantra *”Never run out of liquidity”*. How much money to be put into equity before you decide, review your portfolio and financial situation. Define the range of various asset classes that you would like to own in your portfolio. Check out for safety requirement for your financial needs and then decide how much money to put into equity.
Our suggestion at *InvestmentMitra* is to use mutual funds or ULIP plans with nil premium allocation & policy admin charges for equity exposure, debt mutual funds, bonds, company fixed deposits, small saving schemes and bank FDs for debt investments and sovereign gold bonds and gold based mutual funds for investment into gold. Increase your exposure to equity in parts for long term wealth creation and debt to meet your requirements over next five years.
Please do write or call your *InvestmentMitra* for any information, query or help for all your financial needs.