Make hay while the sun shines

There is a lot of money to be made by indulging in the Indian Equity Markets in the next year or so.

I love investing and have been active for about a decade, barring the years I was doing my full-time MBA. It is my firm belief that you would never lose money in the Equity/Stock Market if you do your homework before investing and have patience if things don’t work out well.

What kind of homework does it entail and how things look going forward?

1. Economic Outlook: If you follow financial markets, you would know that we have been experiencing good growth since the Modi-led government took charge of the office. The decision by the Fed to keep low interest rates in the US have only added to the growth. There are some global risks, like Brexit vote in the past and the threat of a sustained slowdown in China, but our domestic factors have insulated us from these risks so far.

A win for Hillary Clinton in the upcoming US presidential elections would further add to this growth, and it is indeed looking a possibility going by the poll numbers.

2. Earnings Growth: Companies have been reporting decent bottom-line growth (profits), more so in the case of small and mid-cap firms. Though the top-line still has to show some improvement, without any major setbacks, the markets would only add to the returns.

Having said that, not every sector will do well (and understandably so), so one has to see where money can be made. Off late, Financial (especially NBFCs) and Auto Sectors have done remarkably well.

3. Domestic Factors: Be it good monsoons, stable economic and inflation outlook, and the recent decision by the RBI to cut the Repo rate, the news has been good all along. There is abundant liquidity in the system, which seems to be only going up.

The economy-friendly policies by the Modi-led government have been adding fuel to the growth engines, the recent being the passage of Goods and Services Tax (GST) bill.

4. Foreign Investments: Foreign Investors have poured in billions of dollars this year, and this is evident in the sharp rise in the markets over the last few months. Since the beginning of the year, BSE Sensex has given over 8% returns. And if you had invested in a handful of strong small or mid-cap companies, you would have easily made more than 20% returns!

If you have never played in the market, this might all seem daunting to you. The best way is to open a Demat account and start investing using the Systematic Investment Plan (SIP) route, where big fund houses would invest on your behalf. Since they have to earn their own livelihood, they won’t disappoint you as well!


Disclosure: These views are of my own. Investments are subject to market risks, so do a bit of homework before you jump in with your hard-earned money! And never invest all of your savings, and that too in just one fund/stock!

Image sourced from here

40 thoughts on “Make hay while the sun shines

  1. Brilliant sir.. but it’s the homework which is more daunting .. to understand the ways.. I have never invested which has been so very wrong of me ..

    And it is so scary to me all of it the numbers etc.. I want spoon feeding..😀😀

    Liked by 1 person

      1. Totally understand. . But as I said scary of the numbers. . I have to work damn hard to get the money. Its not the usual 9 to 5 job easy peasy.

        Some people like me don’t have the knack.. and that’s when friends help out.

        Liked by 1 person

  2. I like your parting note – not investing all of your savings at once. I think that is wise, because no matter how much research you do before putting your money forwards, the stock market is volatile territory. As the sayings goes, don’t put all of your eggs into one basket. I have never tried my hand at the stock market game, but perhaps some day when I have other secure investments such as properties under my belt to keep me afloat 🙂

    Liked by 1 person

  3. The adage looks attractive Alok but I am a really conservative person when it comes to investment. I prefer not to put all my eggs in one basket. Also you have shown your political affinity in the US presidential race and hope the winner is able to keep up the momentum going!

    Liked by 1 person

  4. I think as long as you invest in good companies or the leading companies in any sector for sustained period without indulging on a basis of insider tips, you are likely to gain. Unfortunately, most investors enter share market with a speculative mindset and that’s where they fail. Choose your company and stay invested. one should always review and re -review the investment. great post!

    Liked by 1 person

  5. Good points. Like you said investing in stock market could be daunting if anyone has never done before, i fall in that category. But deep within, I do have this wish to start doing it someday. Thanks for sharing Alok. It’s really insightful. 🙂

    Liked by 1 person

  6. Wonderful sir, as we say here that investment in FD for a year is good but for 10 years is bad and investment in stocks is bad for a year but good for ten years …. And yes home work before investing in stocks is must must and must.. for that a simple look at its net profit margin(more than 10%) with debt free status, Should give u sound sleeps 🙂
    Wonderful write up sir … Thanks for sharing..
    Wishing you a beautiful day ahead 🙂

    Liked by 1 person

  7. That’s some nice tips Alok. While your prediction on the presidency didn’t come true, what economic impacts do you think Trump’s presidency will have? While I am continuing with my SIPs, I am now wondering how long / how big would the demonetization impact be in terms of affect the GDP growth etc.

    But yes, I have been investing in SIPs for more than 5 years now and I truly agree that only once the Modi govt came to power that the returns have moved into the 20%+ levels when earlier they were just about 10-15%.

    Liked by 1 person

    1. Good to see you back here, buddy.

      Demonization is already having a -ve impact on a few cash-driven sectors…that will stay for another couple of quarters or so. But market is already factoring it out slowly.

      Trump’s impact is more or less gone now. It is more of US Interest Rate scenario that would drive global markets to a major extent. Oil prices is another.

      Considering all these macro factors and domestic policies, i feel this is the right time to buy socks. I don’t expect a major crackdown in prices from hereon…so i am betting on up move soon (starting Feb/March).


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