2019-What’s in for “Us”
Year which started with lot of optimism and promises, but came a burst of Tsunami which was filled with lust and fear and swept over all asset classes. Finally it could be attributed to be a year which everyone would like to forget and mover forward for a brighter day. Volatility which killed both the “Bears” and “Bulls”. Finally there were no winners but came lot of learned professionals.
Learning from the event will add value to our future investment action. 2018 was a year which teaches that Earnings and valuation most important parameter for investors and always High PE will not sustain and we need bend to the valuations. Equity that is what happened and globally the exuberance cam to an end and valuations started looking sensible post correction.
Commodities, Crypto, Currencies, Bonds every sector took a beating and by the end of the year managed to reduce their losses. Bullion were the only asset class which were stable with lower volatility.
What’s in for us in 2019
Globally its is well known now that liquidity is hard to come and without that markets will take a breather. Already major averages have corrected and can consolidate more if there is no action on liquidity. FED if becomes more adventurous and increase rates more than 1-2 times then we are in for a major correction in the market( We don’t feel that FED will do more than 1 ) Globally commodities correcting will ease inflation and the trade war might also be less brutal than expected and this also will be added positive for the commodities stock.
Emerging markets can show revival in investments due to the lower commodity prices and a confused state of Developed market economy. So next 15-20 months can be a shift from Developed to the Emerging Market rally.
India now is on a better footing with lower interest rates, lower crude price, new RBI chairman, domestic liquidity, General election. So these are some key events which can drive the market higher in coming 15-20 months and specially mid-small cap recover their lost ground as they benefit more on the above events which are unfolding.
Our previous year investment strategy of Investing systematically from debt to equity and also investing in Balanced, Arbitrage, Equity savings and Credit risk funds have proven to be right and we continue the same strategy until general election result and post that we can take an aggressive call .
We still believe that the current uptrend in the market will be base for a higher top to be formed for this bull trend which started in 2014. So we need to keep our asset on the watch and do our shifts regularly so that we don’t get ourselves stuck in the exuberance/over optimism. Most of the small and mid-caps are down even with good fundamentals, This is not because they lack earnings, its more to do with market sentiment and this is sure to turnaround shortly and we will be making our way back to our prices and also much higher.
So our aim is to recover the lost opportunity of 2018 and maximize our returns in 2019 and simultaneously lighten our investments before end of 2020. Overall markets are expected to continue its volatile journey but with upside bias and we should not rule a 10-15% upside in this year( note it might not end the year at high, but we can expect it to move within the next 12 months)
We wish our investors and friends a happy and prosperous new year 2019 and look forward for your continued support and trust in our services.
