Corporate earnings have bottomed out and with the Reserve Bank of India cutting interest rates to boost growth; the market is invariably propelled northwards. The market lull is the best time entry time for maximizing the exposure in the market.
Investors have to be patient and have a long crack at the stock market – say 5-7 years. It’s the inflection point that the Indian economy has touched. This is a point when the corporate earnings and the GDP have touched the lowest. Economic momentum is something we look forward to.
India has seen the worst of the macro-economic factors and things can only get better. As there have been literally no returns over a five year period (BSE30 - 21000 in Jan, 2008), corrections are awaiting equities.
Predicting the market is the most unpredictable thing to do, and with major events such as the general elections in a year’s time, being safe and away from the daily volatility is heaven. However, its important to benefit from such an environment. The answer comes with the letters, SIP. Corrections and events in mind, its best to take systematic investment plans (SIP) route for equity investments. The interest rates expected to fall resulting a boost in the equity market. The competition – real estate, gold and FDs are fading. These have been the safe house for investors but the roof is falling off. Gold prices falling by 20% from its peak and with the FD rates declining, every indicator points to the lucrative equity market.
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