S. Naren, CIO – Equity, ICICI Prudential AMC says historically whenever money is invested with interest rates at highs and markets at attractive valuations, returns in the near future have beaten expectations of gloom that were prevailing then. His perspective on the current market situation makes interesting reading...
Valuations:
- Becoming attractive
Economics:
- Has destroyed sentiment. If it’s in the news, it’s in the price!!!
Newspapers headlines say it all
Economic Times - Goodbye 2020, Hello 1991.
Business Standard – Slowdown gets worse, GDP growth sinks to 9-year low.
What's going unnoticed - SILVER LINING - BRENT CRUDE AT US$ 101.73 PER BARREL.
Sentiment:
Extreme pessimism and gloom. Domestic investors completely apathetic - underweight equities since last 4 years.
Triggers:
Rupee depreciation can cause panic in the administration to work on stabilizing currency. Deteriorating deficit likely to press government into action, expect diesel price hike in near term.
European Central Bank (ECB) may come up with deposit guarantee solution that will stabilize Euro-zone banks.
Conclusion:
Past Experience: Rarely lose money when one invests money amidst panic and gloom. Instead you have an opportunity to make reasonable returns.
Not important to bother which scheme to invest, any diversified equity fund from these levels can deliver good performance.
Either make lump sum investments or systematic transfers into equity with money parked into ultra-short term or short term schemes.
