“It’s all Over !!”
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“Nobody can make money from markets”
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These are some of the Lines we are hearing these days. People are cursing the markets and withdrawing / redeeming money from possibly stocks or mutual funds. Financial Institutions on the other hand are bringing more complex products at these difficult times.
I beleive at times of crisis its best to keep things simpler. Nifty linked debentures / Structure products, etc…………. “Do you understand all this ?”
Mutual Funds are the best bet in all market conditions. They are simple to understand and easier to follow.
So the Golden question……..WHY EQUITY?
People have started putting questions on India Growth Story. Had i asked this question 6 months back the typical answer would have been “30000 jayega sensex”.
That was the effect of the strong bull run we had…….. COUNTRY GROWTH = STOCK MARKET ROWTH
Well it is somewhat true but not totally. While the stock market reflects the countries economic picture but there might be some companies which are not listed but are growing. And in these times there might be some listed companies going UP in stock value.
Indian growth story is not a blip but a reality. We never stopped spending money all the time the markets were falling although some might have spent lesser. Consumption and spending is the strength of Indian Economy. We spend and companies earn.
When money comes easy as it did last year, then it does not create wealth but becomes a trading profit. Creating Wealth is a Long term process and Investing in Equity is a Long Term phenomenon.
An interesting example is a Flat of Unitech Nirvana in Gurgaon has risen by 30 % in last 2 – 2.5 years. Just see by how much has the stock price for UNITECH risen.
I strongly beleive that Equity is the best Welath Creator in Indian scenario. If Colgate as a company is growing then you cannot participate in the growth story by buying Toothpaste of Colgate but you need to buy the stock of Colgate. Similalrly you dont need to buy cement to benefit from growth in Infrastructure Sector…………you buy a cement stock or invest in the Infrastructure Fund.
Next time lets talk about real estate……………………..any questions on current post can be put to me directly on anilbudhraja@yahoo.com
