Should you Invest in Indian Equities Now?

The answer is YES!!! Because Price to Equity (PE) ratio has fallen from 28 to below 19 which is an indicator that markets have become cheaper. While this makes your current portfolio go in the red or lesser green it is a good buying opportunity.

Even seasoned experts are unsure about the bottom of the market but there is no doubt that it is right time to start buying with an expert advice.

?Unlike covid phase where market fell 35% in one month and recovered in under 4 months, this time it will take about a year as the fall also took 6 months.?

Why should I invest in Indian Equities?

1. Even after the central bank squeezing back the liquidity, consumption is not slowing down.
2. Crude oil prices have doubled but USD to INR has barely grown as compared to other currencies.
3. Purchasing Manager Index is growing in India while its dropping in the entire western world.
4. Remarkable growth in Indian manufacturing coupled with Anti China sentiment.
5. The Five and Ten year inflation projection of RBI is around 5.15% which is lower than current inflation and is at pre covid levels.

Do I have major Risks other than standard market risks?

1. Crude prices not dropping to previous levels as India depends heavily on Oil imports.
2. China - Taiwan War. This is a black swan event but if it happens then it will disrupt the semiconductor supply and cause supply chain problem all over the world.

If I have higher risk appetite and want to take more concentrated bets, what should I do? You can at the following themes:

1. Gold and mining companies - in times of crisis gold always is a good hedge
2. Financial services - have been sold the maximum by FIIs but will get the most advantage of rising interest rates as lending rates are increased immediately but deposit rates go up after two quarters on average.
3. Pharma - At levels lower than historic averages and is always a defensive theme.
4. Global Tech - Most Tech Giants have returned to pre covid levels in terms of valuation but they could face pressure for some more quarters are they are mainly from USA.?

How much of my assets should I invest in Equity? Based on the type of Investor you are,

1. Conservative = 25%
2. Moderate = 50%
3. Aggressive = 60-65%

This is broad allocation, if you want to get a detailed personalised allocation,

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