With Recent turmoil in world markets
and our Indian market, all thanks to china… the Indian equities have started to
look far much cheaper than they used to be…
Many a people I see are busy
discussing about the time when turnaround happens in markets, so they can time
the market. Different people have different theories… but not many I found have
applied common sense (ironically it is not so common to have common sense
prevailing) in investing. I guarantee not the biggest investment gurus have the
ability to time the market with perfection.so make sure you can never time the
market.
Next what should be the timing to
invest??When will markets revive??
Fundamentally
speaking, the common wisdom is that the stock market follows the economy in
turnaround. The economy gives various signals based on which stock market reacts.
Now consider a few facts:
India’s
indirect tax collection has risen sharply by around 36 %, though petrol duties
were part of it, but it does indicate a revival in economic activity too.
Sales of
commercial vehicles have been increasing steadily, signs that higher demand for
shipment of goods.
Industrial
output, the IIP has risen to 4.2 % in contrast to 3.4 % YoY. The Manufacturing
PMI is at 52.7 in august, up against 51.3 in June.
These
indicators are clear triggers for stock prices to rise, hence time is ripe to
pour in money into our domestic market and let’s not get too much carried away
by the problems of the whole world.
Low commodities prices will surely
help India Inc.’s profit margins which will strengthen their balance sheet in
future, thereby they will disburse more profits to their employees in form of
bonuses, salary hikes and who in turn will spend more in raising their standard
of living. This will fuel domestic demand and thus the cycle will continue
unless and until an external factor pours in.
So it is
not the time to worry, but time to invest, so you can reap the benefits in
future and raise your standards of living.
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