Macro headwinds have been building, as high prices and aggressive central bank tightening have started to curb consumption, which may cause a sub-trend growth outlook in 2023. (4/n)
While the U.S. dollar has started to weaken, it is still at very strong historical levels. If it continues to weaken in 2023, that would certainly be good for EM debt priced in non-dollar local currencies. For eg: India. (5/n)
During the 2010s EM equities suffered their worst performance as an asset class going as far back as the 1930s. Fast forward 10 years and most emerging countries like India, Brazil, & Indonesia started the 2020s in much better shape economically than in the previous decade. (6/n)
OPEC’s recent decision to cut production quotas underscores the role that high prices play to incentivize investment. A fall in prices now could disincentivize investment and lead to higher prices when demand recovers. (7/n)
The reopening of China poses an opportunity for capturing global growth since it makes up nearly 1/5th of the global GDP and the prospect of a sharp upswing at a time of slow global growth is enticing. (8/n)
India is projected to grow at a healthy 6.9% in 2022-2023 - at a time when global GDP is expected to slow down to 2.7% from 3.2%. It is estimated that CAD will be at 3.6% of GDP and fiscal deficit budgeted at 6.4% of GDP in 2022-23. (9/n)
Uncertainty only means opportunities opening across the board. The debt market is set to offer better returns than in the past, with short-term duration funds offering the best risk-reward ratio. (11/n)
India has been increasingly exploring equity as an asset class. It is heartening to see inflows from domestic investors and DIIs beat the dominant FIIs.
(1/n)
#Equity #AssetClass #Investor #FII
For a retail investor, Mutual Funds (MFs) are the suited and preferred way to get a hang of equity assets. Passive funds have become popular over the recent years.
(2/n)
#RetailInvestor #MutualFund #Equity
Active Fund Managers are backed by a research team that allows them to make well-informed decisions based on market opportunities.
Passive funds, however, follow a #benchmarkindex and require no fund manager or research team, thus reducing their cost.
Changing asset allocation is a sure shot way of ensuring risk mitigation in an investor's portfolio. But if you are already owning a portfolio of equity that you built assiduously, you are posed with a peculiar problem. (2/n)
#AssetAllocation #Investor
Should you sell your equity portfolio down as part of your risk mitigation? (3/n)
The markets seem to have hit a new all-time high and turned. Clearly, the index highs need more legs to stand on and still need tremendous firepower to rise. (2/n)
#markets #personalfinance
With at least three major index constituents, private banks, information technology and pharma struggling to hold onto their recent valuations, it becomes a steeper climb for the index from here. (3/n)
The markets have intense spells when politics prevails over everything else in directing sentiment. Closer to every general election, this trend returns to haunt the markets. (2/n)
But, the ability of politics to drive sentiment is influenced by how much the outcome of the election will drive change. If change is likely to be significant and for the better, the markets can run up ahead of elections. (3/n)
The markets go up too quickly when people are least prepared for it. That setting is perfect for us to get that fear of missing out. We call it the FOMO feeling. (2/n)
The markets seem to be progressively losing steam. This would show up as weak sentiment, selling pressure, lower volumes on exchanges, and FII outflows. (2/n)
But, there is also a section of domestic investors showing remarkable resilience and persistence in their investing. They are still buying every dip and gradually scaling up their portfolios. (3/n)