Bet on the recovery

The market has a mind of its own. It won’t go down because investors want it to.

So what if you missed the Modi rally in the Indian markets? Most investors did not buy before the results. Few were prepared for the big move. And, those who did buy after the elections have also done a rush job that looks good to date. Events come and go. Positive sentiment on the back of political change can easily change on geo-political worry or global market tumult. Markets keep throwing opportunities at us. Missing an opportunity like this always should teach one to prepare for the next. First, one must be clear that Indian markets are not expensive. Sure, they aren’t cheap as they used to be either. But, we could see corporate earnings expand on the back of falling commodity prices. A few percentage points of margin expansion can send corporate earnings booming. Indicators point in that direction. So, stay in the hunt. Invest steadily. Use a sharp dip to raise equity allocations.

Investment Strategy: If you missed the Modi rally, make sure you bet on the economic recovery.

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