“Unless you buy a stock at the exact bottom (which is next to impossible), you will be down at some point after you make every investment. Your success entirely depends on how dispassionate you are towards short term stock price fluctuations.” -Joel Greenblatt
In the last one year we have observed that many new investors suffer from financial anxiety because they indulge in the futility of trying to predict the market. Timing the market & consistently doing it is near impossible task (unless there is a black swan event like COVID, War, etc. where there is an intense selling by a few big players). This financial anxiety results in Invetment return > Investor’s return.
From the experts:
Indian macro dataflow remained strong:
Manufacturing PMI: Manufacturing PMI rises to highest in over two years, reaching 57.8, and remained in expansion zone (>50 points) for the 18th straight month;
GST Collection: Collections of INR 1.49 Tn (+15% YoY) in Dec’22 concluded the tenth consecutive month of collections over 1.4Tn mark. Increased revenue from imports and domestic transactions have led to the sustained levels;
Credit growth: Credit growth accelerated to 17.4% YoY as of 16th Dec 2022 against YoY growth of 6.21% as observed on 16th Dec 2021;
Inflation: Dec’22 CPI inflation eased to a 11 month low of 5.88% – below the monetary policy committee (MPC) target;
Trade Deficit: Trade deficit continued to remain elevated at >$25B on continued deceleration in exports and strong domestic demand of imported goods;
Forex: India’s forex reserves increased to $563B – enough to sustain nine months of imports;
Indian equities snapped a two month gain in Dec-22, with Sensex & Nifty declining 4% each;
FPIs bought $1B of Indian equities in the month of December
RBI MPC hiked rates by 35bps;
RBI hiked interest rates on small savings schemes (Term deposits, NSC, Senior Citizen Savings Scheme) by 110bps.
Outlook:
As we enter 2023, we see an environment where both inflation and growth might be slowing. Both from cyclical and structural perspective, India seems to be better placed vs rest of the World. Domestic demand continues to be strong. Policy reforms, huge under investments in Capex, stronger corporate Balance Sheets have potentially created a robust platform for a virtuous cycle of growth.
While India is likely to be amongst the fastest growing economies, the near-term global uncertainties are unlikely to wither away soon and the volatility can be potentially higher in the short run.
Disclaimer: The views expressed herein constitute only the opinions/ facts and do not constitute any guidelines or recommendation on any course of action to be followed by the reader. This information is meant for general reading purposes only and is not meant to serve as a professional guide for the readers.
