The Indian stock markets have been buoyant over the last year with both the NIFTY & the SENSEX clocking over 30% growth in the last 1 year. The BJP led NDA government has been perceived to be a more investor friendly and reforms driven leading to improvement in sentiments. In addition to that a clear majority in parliament will bring more stability in the government & help taking more tough decisions.
In addition to this there has been an improvement recovery in economic parameters over the last year. There has been manufacturing growth , marginal decline in inflation & overall GDP growth rate and improvement in credit offtake. There has been a marginal easing of interest rates & I expect interest rates to decline further going ahead.
With the BJP in power markets are expected to remain positive going ahead. I expect excellent returns from the markets over the next 5 years even from current levels when markets are close to all time highs. So this is possibly the best time to enter/re-enter the stock markets in a big way and you will definitely get excellent returns atleast for the next 5 years if not more ..... so start investing wisely ..... equities is the place to invest now !!!!!
We should take advantage of this and focus more on investing in equities: think beyond bank fixed deposits. For example: In the year 1999 SBI allotted shares at Rs.100/share, Current Price is Rs. 2500, Rs. 1,00,000 invested in 1999 in stock of SBI has became Rs. 25,00,000, If someone had invested in a Fixed Deposit of Rs.1,00,000 in 1999 it has grown to only about Rs. 4,00,000.
Just to re-iterate the point on investing in equities now:
1979- 100 points
1988- 600 points
1998- 3600 points
2008- 21600 points
2018- 129600 points ... ??
6X every10 yrs ! Don't know exact but 60% of it is 3X from here in just 4 years...
Just to aid savings and help you take advantage of investing in the markets on the one hand there has been an increase of Rs.50,000 deduction u/s 80c .... take advantage of it by investing in SIP of ELSS(tax exempted mutual funds).
There has been a marginal correction in the stock markets, a few frontline stocks post budget. The outlook over the next few years remain positive. This is a good time to enter the markets. The couple of sectors I am positive on are banks (SBI) and Infrastructure ( L&T).
Its Raining Moneys for the Markets…
Sabyasachi Paul has been associated with equity research and advisory on equity markets in India for over 9 years & currently heads the equity research desk of Eastern Financiers Ltd, Kolkata.He also manages a portfolio on the online platform Kristal. Find link to the strategy named 'The Tortoise'