Resilient Indian Economy to help you make wealth?

In US, the democratic president and republican speaker reached the agreement on debt ceiling. This is a greatest relief to the US markets at least for the next week.  

Most retail investors portfolio in USA  Is down by at least 25%. Anyway those portfolios that  bet on AI stocks are in black.  Broadcom (ticker :AVGO) was up by over 30% last week, on Friday itself it was up by 11.52%. Adobe (ticker : ADBE) was up by over 12% last week and on Friday it was up by 6%. Other stocks including Microsoft, google NVDA made huge gains in the recent past. These stocks were discussed in the last meeting. In the last 5 trading days most of the stocks have gain over 10% and we have to conclude that the meeting was very successful. 

As far as Indian markets are concerned, corporate results are showing mixed trends. The analysts estimates have gone wayward. No one is sure as to where commodities, interest rate and economic scenario are headed in the short-to-medium term.  It’s better to buy stocks which are offering value rather than to pick momentum. One good thing is the CPI inflation rose just 4.7% in May 2023, marking the weakest reading in 18 months. The WPI fell to a near three-year low of 0.92 in April, slipping into negative territory for the first time in 33 months. These indicators are good for the economy. 

AMFI data shows that there has been a consistent increase in domestic individual  investors participating in the markets using mutual funds. The value of assets held by individual investors in mutual funds have increased from Rs 21.56 lakh crore in April 2022 to Rs 23.92 lakh crore in April 2023, a steep  increase of 11%.

Financial savings in India still have a long way to go. In India, the average household holds 77% of its total assets in real estate, 7% in other durable goods, 11% in gold and the residual 5% in financial assets (such as deposits and savings accounts, publicly traded shares, mutual funds, life insurance and retirement accounts). The data shows we are still a long way to go in competing with advanced nations.

If you ask me what’s worth looking for medium term, banking  appears as a safe bet to me. I may be wrong but I don’t want to go away from banking now as the technical trend appears to be favouring banks. It may not be like F1 legend Michael Schumacher or Virat Kohli or Wladimir Klitschko, or Lionel Messi but safe enough like Floyd Mayweather Jr., Rahul Dravid or Felipe Massa or Kylian Mbappe. It’s better to give some percentage in your portfolio to banking stocks as they have all posted great results in the last quarter. Of course most of them have corrected from their recent highs and offer value too. This is it for now and let’s discuss more in the coming days.