WealthBulletin ?? April 2023

Hi Reader ??,

Greetings and Welcome to WealthBulletin!

After 3 months of continuous fall since the new year began, markets have finally shown a bullish divergence and closed on a high note. You are reading it right, we have crossed 18,000 levels on Nifty due to good buying by institutional investors.?

With this we present to you our April edition of WealthBulletin containing economic snapshot of India, a blog on riding the trend, a story which you will love, and much more.

We hope you enjoy this edition of the WealthBulletin.

Click here to download the WealthBulletin

NewsBaskets ??

Global and Domestic news that moved the markets

? SEBI has approved the setting up of a ‘backstop fund.” This will help corporate debt funds when they face low liquidity or a financial crisis.?

? CNG and PNG will get cheaper for consumers by over 6% due to change in the pricing formula by the Indian government.

? Global food prices (measured by the FAO price index) stood at 126.9 in March 2023 against 159.7 in March 2022, the lowest since Russia-Ukraine tensions began.

? The Indian government has removed the windfall tax on crude oil and reduced it to ?0.50/litre for diesel.

? Electric two-wheeler sales in India rose around 2.5 times to 8.46 lakh units between FY22 and FY23.

? Net investments in equity mutual funds increased 31% vs the previous month to ?20,534.2 cr in March. Debt funds recorded a net outflow of ?56,884.13 cr.

? Ebixcash, Survival Technologies get SEBI's go-ahead to float IPO.

? RBI has introduced draft guidelines for the levy of ‘penal charges’ instead of ‘penal interest’ for default payments on loan accounts.

? The move will reduce the burden of excess interest on borrowers.

? Apple Inc triples its iPhone output in India to $7 Bn in a bid to shift from China.

? SEBI bars brokers from creating bank guarantees with client funds.

While studying at the University of Edinburgh, Darwin stumbled upon the essay "An Essay on the Principle of Population" written by none other than the famous economist Thomas Malthus. In the essay, Malthus argued that populations tend to grow faster than the resources available to support them. This leads to competition among individuals for limited resources and a struggle for survival.

As Darwin travelled the world after completing his education, he observed the incredible diversity of life on Earth and how each species had evolved to fit into its environment. He remembered Malthus's idea that populations compete for resources and thought it applied to all species. This led him to develop his own theory of natural selection, which held that the fittest individuals in a population would be more likely to survive and pass on their advantageous traits to their offspring.

Malthus's ideas helped Darwin understand how competition and natural selection work in nature. Without Malthus, Darwin may not have come up with his theory of natural selection, which was a big contribution to the field of evolutionary biology.

So what does this have to do with the stock markets?

The concept of competition and survival of the fittest is not limited to biology. It's also an important principle in economics and finance.

In the stock markets, companies constantly compete for resources, including investors, capital, and market share. The companies that are most efficient, innovative, and adaptable are the ones that tend to thrive and grow, while others may struggle or even fail.

Moreover, stock market investments are subject to the principle of natural selection in the same sense that investors select the most promising companies to invest in, and those with the strongest fundamentals tend to outperform their peers in the long run.

In conclusion, by understanding this principle and applying it to your investments, you can make more informed decisions and potentially reap greater rewards.

BlogBaskets ?

INVESTING STRATEGY

Momentum Investing: Riding the trend

As students, we have learnt about Newton's First Law of Motion, which states that an object at rest will remain at rest, and an object in motion will stay in motion, unless acted upon by an external force.

Momentum investing relies on the same idea that stocks that have been performing well in the recent past are likely to continue to do so, as they have already established a trend in a certain direction. Just like an object in motion, these stocks have built up momentum, and investors hope to ride that momentum to capture gains as the trend continues.

This blog covers all the important details about this investment style in detail.?Click to read more.

WordBaskets ??

ECONOMIC THEORY

The Green Bubble

The green bubble theory suggests that there is too much investment in renewable energy, and many clean tech companies have borrowed too much money. As interest rates go up, some of these projects may fail, which could hurt the renewable energy industry.

BEHAVIOURAL FINANCE

Prospect theory

This theory says that people often make choices based on what they think they might gain or lose, rather than looking at the actual value of the outcome. This means that people may be willing to take on more risk to avoid a loss than to achieve a gain.

FAQBaskets?

We hope you like this edition. Stay tuned for next month’s market update.

Warm Regards,

Team WealthDesk??