"This time it's different"- Bear Markets And What We Can Learn From History

April 2020 - The uncertainty and panic surrounding the Covid-19 crisis has led to rollercoaster stock markets. The extreme volatility is worrying for investors and one question I am frequently being asked is “Have we seen the bottom yet?”

At this point the answer to this question is guess work. It all depends on how quickly we are able to contain the virus, how quickly a cure and a vaccine can be found and how quickly regular economic activity can be resumed.

However, since I first started investing in Emerging Markets back in 1987 we have experienced a number of crises and bear markets including the Asian financial crisis, the subprime mortgage crisis and others. We have also witnessed and profited from the recoveries that followed. While this particular crisis is unique in the scale of the actions taken by governments around the world and their effect on economic activity, as regards to the reactions of stock market investors around the globe there are similarities to previous stock market crashes.

Some say that this bear market is unique and we have never experienced anything like this before. But it’s important to remember that, as someone once said: “This time is different’ are the most expensive words in the world.” Human behaviour tends to follow predictable patterns because of built-in emotions that make us human.

So what can we learn from history that will enable us to make better investment decisions in times of crisis?  Looking at previous bear markets can provide some indication on what we might expect in the current market environment and going forward. Therefore we took some time to study 11 stock markets (U.S, U.K., Turkey, Korea, China, Taiwan, Brazil,  Japan, Thailand, India and Hong Kong ) and their bear markets since the end of the 1980s. We have not included the current bear market since it may not have ended yet.

The Global Picture

We define a bear market as a decline of 20% or more over a period of at least two months. If this was followed by a 20% rise over a period of at least two months we considered a subsequent fall of 20% or more a new bear market. Because international investors are usually more interested in U.S. Dollar returns we have chosen USD indices rather than the local currency ones.

Based on these indices the average bear market decline was about 49% across all markets but the declines ranged from a low of 23% to a high of 92%. In terms of the length of time a bear market lasted (from the peak of the bull market to the lowest point in the bear phase) on average over a year, to be precise about 15 months. But the range was from a few months to over three years. As one would expect the Emerging Markets proved more volatile than the developed markets with more bear markets, a higher average decline of 51% and a shorter duration of about one year.

But let’s have a look at the individual markets. (Please note we are not yet counting the recent market downturn).

U.S.

Examining the world’s largest market, the U.S., we focused on the S&P 500 Index and found that since 1987 the market experienced only three bear markets, excluding the current one. Those three bear markets averaged a 47% decline and ranged between a low of 34% and a high of 57%. The length of time of the bear markets ranged between three months and three years and averaged 17 months.

U.K.

In the U.K. the market (in USD terms) was more volatile than in the U.S. Since 1987 the FTSE 100 Index (USD) experienced six bear markets with declines ranging between 65% and 23% with the average being 38%. Like the U.S. the average length of time was 17 months for the bear markets with a range of 4 months to three years.

Turkey

Turning to emerging markets, we found that the Turkish market was highly volatile. This is one reason why this market has been very attractive to some investors who love volatility since it provides them with more opportunities.  

During the time period starting in 1988 the Turkish market experienced 10 bear markets which showed an average decline of 64% with a range of between 81% and 46%. The average length of the bear markets was 14 months but ranged between a high of three years and a low of 4 months.

Korea

Next on our list was Korea, another volatile market with nine bear markets. Those bear markets averaged a decline of 49% ranging from a low of 27% to a high of 86%. The average time length of all the bear markets was 17 months and ranged between 4 months and three years.

China

We found that the China market had a total of eight bear markets averaging a decline of 56% and ranging between a low of 33% to a high of 82%. The average length of time was 14 months with the longest period being more than two years and the shortest five months.

Taiwan

We would expect the Taiwan market with its economy so closely tied to China to perform similarly but that was not the case. The Taiwan market proved to be more volatile with 11 bear markets between 1988 and 2019. The average decline was lower than in China with 48% ranging between a high of 80% and a low of 23%. The length of the bear markets ranged between a few months and almost two years with the average being 11 months.

Brazil

The Brazilian market experienced 11 bear markets during the period averaging 56% decline and ranging between a decline of 75% and 35%. Average time length was 12 months ranging between a few months and almost three years.

India

In India, the market experienced nine bear markets averaging a decline of 44% ranging between a high of 71% and a low of 24%. The average time length for the Indian markets was a little over one year.

Japan

In Japan there were seven bear markets averaging a decline of 42% and ranging between a fall of 62% to 24%. The longest bear market in Japan lasted more than three years and the shortest 9 months with the average at 24 months.

Thailand

The Thai market was rather volatile with ten bear markets averaging a decline of 46% and ranging between a high fall of 92% and a low of 24%. The average length of time was nine months.

Hong Kong

The last market we looked at was the Hong Kong stock market, which witnessed eight bear markets since 1987. The average decline was 45% with a high of 64% and a low of 21%. The average length was 13 months.

What lessons can we draw from history?

So what can we learn from the above? We can see that on average bear markets declined by about 50%. The developed markets declined even less on average. In terms of the length, a bear market lasted on average more than a year. Bear markets in emerging markets were on average lasting shorter than bear markets in developed markets. This is important, as I believe the critical question is not only what the bottom is but how long it will last. You will need the cash reserves to continue to gradually buy and hold for what may seem like a long time.

So at what stage are we now? Most markets went down between 20 and 30% so much less than the average 50% we have seen above. The market swings have been wild on the upside and the downside. As I write this piece the indexes might already have moved higher or lower.

This kind of volatility is not unusual. If we look at the behaviour of the indices in bear markets we see that this sort of up and down is part of the game. So unfortunately the recent positive movement in many markets does not necessarily mean that we will see a continuous upward trend. There will always be backtracking and corrections along the way. This seems to be confirmed by the historical data from previous bear markets. However, the figures mentioned above are averages and averages are exactly that. The range can be wide. Many bear markets went down far less than 50% so it’s probably a good time to start nibbling but leave enough firepower to continue buying if the markets retreat more.

The full economic cost of the shutdowns around the world can not be accurately assessed and will, of course, be quite different from one industry to another and one company to another.  We merely need to keep our eye on the long term developments and take an optimistic stance: Of the many years since 1987 when I’ve been investing in emerging markets all over the world I can say that there are two conclusions that I can confidently ascribe to: (1) all emerging markets experience bear markets, and (2) all emerging markets recover from those bear markets and experience a bull market. It’s very much like the conclusions of Arnold Toynbee, the famous historian and scholar of civilisations since ancient times. After all the years of study he said that there were two conclusions that he could ascribe to:  First, all civilisations rise and, second, all civilisations fall. The wonderful thing about this phenomenon in emerging markets is that the rise and fall of the markets is relatively frequent and the bear markets tend to be shorter than the bull markets. So if you are a patient and disciplined investor you can purchase bargain stocks in the bear phases when everyone else is selling.

At the rate the coronavirus is spreading globally there might be worse to come but stock markets are starting to price that in. And given the efforts now undertaken by governments, central banks and scientists to contain the crisis I am confident we will see containment followed by a recovery on the horizon but as history teaches us it might not be for another one or two years.

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ETF or Index Fund?

Should one invest in an Exchange Traded Fund (ETF) or an index fund?  

The decision depends on the need of the investor. 

A corporate treasury who has done derivative trades would prefer an ETF because they get real-time prices to exit and enter. 

Retail investors who wish to invest for the long term and are not concerned with intraday prices, would prefer index funds. 

Further, if one wants to opt for a systematic investment plan (SIP), then an index fund is the right vehicle, not an ETF. 

For first time investors, the simplicity and low-cost structure is a good starting point.  Even if they do not have a demat account or a stock broking account, they can access the equity market via an index fund. 

Keeping aside retail investors, a few entities such as certain trusts, cooperative societies and some corporate entities, whose existing articles do not permit the operating of a trading and demat account, would opt for index funds. 

In the current volatile markets, many institutional treasuries and family offices are taking tactical calls on the equity market by investing via low cost, exit load free index funds. A few suggestions to keep in mind when investing: 

• When considering allocation to passive funds, it need not be to the exclusion of active funds. An investor can invest in both, active and passive funds. Don’t view passive funds as a competing strategy but rather, a complementary strategy. 
• Investors should avoid passive funds based on mid- and small-cap themes. It is in these segments, which is often under-researched, that the potential to outperform the benchmark or generate alpha exists. Mid and small cap allocation can be in active funds. 
• In ETFs, there is often a difference between the fair value of an ETF and the prices quoted on the exchanges. This is all the more evident if there is inadequate liquidity on the exchange. Hence investors should review the past trading volumes of an ETF before investing in it. 
• Investors can also easily check the real-time INAV (indicative NAV) before executing a trade on the exchange – the INAV which indicates a real-time fair value per unit is mandatorily published on the website of the AMC. If a retail investor wants to exit and if he/she doesn’t get the fair value, then the overall investment experience is bad. Hence investors should look for ETFs where the divergence between INAV and the price traded is minimum. 
• In an ETF, investors need to look beyond the total expense ratio, or TER. They must look at the total cost of ownership, or TCO. This includes all expenses (brokerage, taxes paid on buy and sell transactions on the stock exchange, annual demat account charges, bid/offer spread, etc.).

Smart Investing in your child's future

Whether you’re putting money away for college or a rainy day, here’s a guide to making sure it grows.

When Tejal, 28, and her husband, Gaurav Mehta, 29, found out they were expecting their first child in March, they quickly began wondering how, and if, they should start saving for future college costs. "Both of our parents were able to pay for our undergrad education, so we probably want to do a PPF & NSC," says Tejal, adding that they also want to put money away for general expenses, such as future education and weddings.

Until recently, the couple, who lives outside of Mumbai, had saved for two purposes: retirement and a house down payment. Tejal, a Primary School Teacher, and Gaurav, an engineer, put most of those savings into the Fixed Deposit's, where it's taken a beating of Inflation. That leaves them wondering if they should put their child-related savings into safer spots, which might not pay much of a return or consider risky assets.

"I don't want to risk too much up and down," says Tejal.

So what should new parents like Tejal and Gaurav do with their savings? 

It turns out that there are some new strategies that work better than the traditional methods of saving.

The old methods include opening a Minor's PPF account, It is one of the favorite investment options of a lot of experts. The primary reason for recommending this is the impeccable EEE feature. Moreover, the tenure or maturity period of this product i.e. 15 years is so very apt in terms of investment for child’s education but while selecting such option primary intention is security to capital and interest. This Accounts  automatically transfers into the child's name when he or she becomes an adult (18 Years). 

The downside is that because the money automatically transfers, parents have no control over the funds after the child reaches that age, which means the child could spend it on anything. Similarly, buying a NSC from the Postal Department, which was once a favorite way of putting money aside for newborns, carries such a low interest rate today that there is little chance of keeping up with inflation, especially over the long-term. Fixed deposit present the same problem.

Here are few new, smart ways to save instead:

1. Risk cover to protect future goals: You should take proper term insurance cover for yourself to secure your child against any unforeseen event. Though these things do happen, but the probability or chances of happening such events would be low or cannot be quantified. “It is advisable to have a risk cover in order to reduce or avoid the financial impact on the lives of your dependent in cased of happening of unforeseen events. Thus one should make sure that the future costs related to your child’s requirement are adequately covered in this insurance. Three important expenses to be noted while going for a cover 1) Education 2)Marriage 3) living expenses till they become adult.”

2. Mutual Funds Child's Funds: According to my personal survey, 67 percent of adults have never heard of such plan, even though financial advisors agree that it's the smartest way to save for college Education and child's marriage . The funds, which are allow parents to invest money that then grows tax-free and remains tax-free as per current Law.

"Depending on the age [of your child], you will be more aggressive, and then become more conservative as your child gets older,". you can select funds SIP (Systematic Investment Plan) and auto top up option. 

For parents who do not wish to create an exclusive portfolio for their children, fund houses have an alternative in terms of children’s plans which are balanced Funds(hybrid Plans). They have been designed in such a way that parents can decide on the different options depending on their investment horizon.

3. Equity Mutual Funds: This ranks right up there in terms of priority. There are two reasons for this – longer time frame (10-15 years) and the mode of investment available (SIP)., a monthly SIP of Rs 10,000 in equity mutual funds for 18 years can fetch you Rs 66 lakh, assuming a return of 12 per cent per annum. Even considering an inflation of 6 per annum, this amount would more than suffice. However, the key here is not the amount invested but the time given. Power of compounding has always been understated. Equity funds have a history of generating 12-15 per cent per annum returns. And SIP, of course, is considered to be one of the best ways to average your cost over the long term.

For a time span of ten years or longer, "Put it in a moderate aggressive investment. Over a ten-year period, you can be more aggressive." The money can then be used for college, living expenses, a wedding, or anything else.

4. A dedicated child's savings account: In today's market, savings accounts carry relatively low interest rates, but they come with other advantages, including the opportunity to teach children about money and savings as they get older. This savings account, in the child's name or the parent's name, can supplement the other, more aggressive investing strategies above. Some banks, offer teaching materials along with kids' savings accounts, and waive fees for low balances as well as requirements for minimum account balances.

"Banks were charging exorbitant fees for parents for zero balance  savings account so we created the kids' savings account," this  also helps children learn about money as they start to save and invest.

5. Invest in Gold (Long Term): Gold acts as a hedge against equity or equity mutual funds and during volatile times. Gold ensures your risks in the financial markets are hedged. “Investments in gold should be either through ETF, gold mutual funds or E Gold. It is advisable to avoid physical investments in gold in order to reduce the risk of storage and the cost associated with the physical holding. Also the prices of the paper gold is derived based on the current gold prices in the market and hence it is as similar to buying or investing in a Gold fund.”

I think, “Without gold, a portfolio is never complete for an Indian consumer. It has always been the favorite investment option. Events like marriage can be called as mini festivals of gold. If gold is such an unavoidable metal, why not start saving for it right away! I believe the best way to do it is through Gold ETFs and Gold Funds. However, make sure this investment does not exceed 10-15 per cent of your overall portfolio or only as much as you would need for the goal.”

It is high time that you make provision for your children’s education and start investing for the same. From the mutual fund industry you can consider either of the two options mentioned above.

Tejal and Gaurav Mehta say they will probably start with the Mutual Funds Child's Funds with SIP and expand their savings from there. Meanwhile, they are trying to figure out how to find savings in their budget, even after their baby arrives. Says Tejal: "We started talking about cutting back on vacations, traveling, and going out … Then we can have more money for the baby's needs now."

-- 

    

 

 

 

      Allaudin Bldg Shop No 1,Manchubhai Road,Malad East,Mumbai - 400097.

      Shop No.9,Param Ratan Bldg,Jakaria Road,Malad West,Mumbai - 400064.
      Tel:28891775/28816101/28828756/28823279. CELL:9930444099  www.tejasconsultancy.co.in |        E-mail Us: ritesh@tejasconsultancy.co.in

Disclaimer:

This POST is addressed to and intended for the investors of Ritesh Sheth & Tejas Consultancy only and is not spam. You are advised to contact Ritesh Sheth & Tejas Consultancy to clarify any issue that you may have with regards to any information contained in this emailer.The views are personal. Ritesh Sheth & Family or Tejas Consultancy does not guarantee the accuracy, adequacy or completeness of any information in this emailer and is not responsible for any errors or omissions or for results obtained from the use of such information. Ritesh Sheth & Family or Tejas Consultancy does not have any liability to any person on account of the use of information provided herein and the said information is provided on a best effort basis. In case of investments in any of our schemes, please read the offer documents carefully before investing.
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Be careful while buying that ‘cheap’ health insurance policy

Be careful while buying that ‘cheap’ health insurance policy offered by your bank

Apart from bancassurance, banks also take group insurance cover for its staff and customers, which may be availed by account holders by paying a nominal premium.

Almost all general insurance companies and standalone health insurance companies have tie-ups with one or more banks to promote their products. Apart from bancassurance, banks also take group insurance cover for its staff and customers, which may be availed by account holders by paying a nominal premium – much less than the premium amount of personal health insurance policies.

Not only lower premium, but such group health insurance policies also offer some additional benefits like maternity cover, lower or no waiting period etc. So, definitely such group policies look lucrative in comparison to a personal health insurance cover.

But wait, inspect the terms and conditions carefully before you rush to replace your personal health insurance cover with the cheaper group policy offered by your banker.

This is because, the group health covers have the following demerits over personal health insurance cover:

Not a permanent cover

You may avail the benefits of such a group insurance cover as long as you are a customer of the bank. If you change your bank, you will lose the cover. Even if the bank ends contract with the insurer, you will lose your cover.

No claim bonus not available

Unlike personal health insurance policy, where you get a bonus either in the form of lower premium or as an additional cover over the basic sum insured for every claim-free year, there will be no such benefits for group cover. The enhanced bonus cover acquired during the disease-free years may prove very beneficial at the time of hospitalisation, when you fall sick.

No life-long renewal

The greatest demerit of the group health cover provided by the banks is that almost all such covers may be renewed up to a certain age, say 80 years. So, during the old age, when you would need the medical care most, you may be left out in the cold with no health insurance cover.

Moreover, at old age, you may get only limited cover and that too with several clauses that would enhance your out-of-pocket expenses even if the cost of hospitalisation is within the limit of insurance cover.

So, don’t go for the cheaper premium, but evaluate the usefulness of the health cover when you need it the most.

You may take the group cover along with your personal health insurance policy as an additional cover to enjoy the extra benefits like maternity cover without much waiting period, if needed. But you can’t completely depend on such group cover and taking personal health insurance policy for yourself and your family is a must.

    

 

 

 

      Allaudin Bldg Shop No 1,Manchubhai Road,Malad East,Mumbai - 400097.

      Shop No.9,Param Ratan Bldg,Jakaria Road,Malad West,Mumbai - 400064.
      Tel:28891775/28816101/28828756/28823279. CELL:9930444099  www.tejasconsultancy.co.in |        E-mail Us: ritesh@tejasconsultancy.co.in

Disclaimer:

This Ppst is addressed to and intended for the investors of Ritesh Sheth & Tejas Consultancy only and is not spam. You are advised to contact Ritesh Sheth & Tejas Consultancy to clarify any issue that you may have with regards to any information contained in this emailer.The views are personal. Ritesh Sheth & Family or Tejas Consultancy does not guarantee the accuracy, adequacy or completeness of any information in this emailer and is not responsible for any errors or omissions or for results obtained from the use of such information. Ritesh Sheth & Family or Tejas Consultancy does not have any liability to any person on account of the use of information provided herein and the said information is provided on a best effort basis. In case of investments in any of our schemes, please read the offer documents carefully before investing.
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I Call it longer pit-stop

I Call it longer pit-stop.....

Rallying on the record breaking FII flows, Indian markets have scaled new highs in the month of November even as Indian macro data continues to disappoint, both IIP & GDP numbers.

I sense that the stronger FII flows and catch up in corporate earnings that is underway, could probably give the markets a longer pit-stop than anticipated earlier. And I am closely watching.

While global economic data has not been deteriorating further, policy stance stays more than accommodating thus leading to a congenial situation for financial markets. Our medium-term expectations are based on continuation of policy support with a significant number of central banks turning dovish and cutting rates, prospects of fiscal support in select economies, cyclical uptick in manufacturing, and forward movement in US-China trade discussions.

On the domestic front, some sectors that have been contributing to large pools of losses appear to be on the mend now with corporate banks and telecom being two of the largest. However, a delay in the revival of domestic demand, a further slowdown in global economic activity and geopolitical tensions are downside risks.

On the markets front, the recent run-up has been very strong, but has also taken valuations closer to +2 standard deviation mark. With valuations once again hovering near its peak, we may see profit booking soon.

I believe that any declines hereon shall be seen as opportunities to invest for better returns in the next 2-3 years. As we have highlighted earlier, I continue to believe that mid and small cap provide relatively better entry points than their larger counterparts for medium to long term investments.

On the Fixed income front, RBI decided to keep the policy repo rate unchanged and continue with the accommodative stance 'as long as it is necessary to revive growth’, while ensuring that inflation remains within the targeted range. Given the evolving growth-inflation dynamics, the MPC felt it appropriate to take a pause at this juncture.

The bond yields have strengthened post corporate tax cut and have remained range-bound with a steepening bias. Government fiscal is under stress with tax revenues falling short, even as government tries to meet budget expenditure targets to support growth. This kind of coordinated response has increased uncertainty in the bond duration space.

I continue to believe that the term premium may remain elevated in the near term and any exposure to debt markets should be taken through short term to medium term debt funds with a high-quality portfolio.

Happy Investing! 

Thanks a lot for your time and allowing us to stay in touch with you. All of us at Tejas Consultancy are grateful for the opportunity. 

   

 

 

 

      Allaudin Bldg Shop No 1,Manchubhai Road,Malad East,Mumbai - 400097.

      Shop No.9,Param Ratan Bldg,Jakaria Road,Malad West,Mumbai - 400064.
      Tel:28891775/28816101/28828756/28823279. CELL:9930444099  www.tejasconsultancy.co.in |        E-mail Us: ritesh@tejasconsultancy.co.in

Disclaimer:

This blog is addressed to and intended for the investors of Ritesh Sheth & Tejas Consultancy only and is not spam. You are advised to contact Ritesh Sheth & Tejas Consultancy to clarify any issue that you may have with regards to any information contained in this emailer.The views are personal. Ritesh Sheth & Family or Tejas Consultancy does not guarantee the accuracy, adequacy or completeness of any information in this emailer and is not responsible for any errors or omissions or for results obtained from the use of such information. Ritesh Sheth & Family or Tejas Consultancy does not have any liability to any person on account of the use of information provided herein and the said information is provided on a best effort basis. In case of investments in any of our schemes, please read the offer documents carefully before investing. 
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I Call it A New Beginning!

In the midst of the festive season, we at Tejas Consultancy, wish you a very Happy Dussehra on this auspicious occasion.

On this day eons back, the Pandavas completed their exile and ventured for a new beginning. Well, India Inc.’s profitably too which was in an exile for the last few years is set to make a new beginning with the slew of measures that the Government has begun to undertake.

With the much needed fiscal push, India Inc. has got a shot in the arm as corporate earnings can now push higher due to the corporate tax cuts. The intent shown by the government will definitely increase confidence within India Inc. and shall lead to ‘A New Beginning!’.

On the global front, the slowdown has become much evident and corrective measures have already been taken by major economies and we believe more monetary and fiscal measures are to be followed. However, Brexit and US-China trade talks would be the key events to watch for, in the months ahead.

On the domestic front, the Indian government with the help of RBI are trying to bring back the economy on track. A direct tax code with a significant simplification and lowering of personal taxes will go a long way to boost the demand, triggered by likely increase in consumer spending. While these tax cuts will help in boost the private sector, a focused approach on NPA resolution and bank recapitalization are needed to kick start credit growth as well.

With the fiscal stimulus announcement, we have increased our allocation to 100% in equities in our Aggressive portfolio. In the Large Cap space, current valuations are reasonable if not cheap and any incremental returns will only come from earnings growth which is underway. As to the Mid & Small Cap Space, the price and time correction over the last 18 months have rendered them relatively cheap vis-à-vis Large Caps. In the past, whenever the relative performance or valuations of Mid & Small Caps have touched the bottom extreme of the Pattern, the journey ahead for them has been very fruitful.

 

In the Fixed Income space, RBI has announced a fourth consecutive rate cut, totaling a 135 bps reduction in 2019 and maintained its ‘accommodative stance’ with a dovish tone. Going forward, factors such as Inflation, crude oil prices, fiscal pressure, and global yields would drive the movement in interest rates.

We believe that the yield curve may steepen, due to the large increase in gross market borrowings in FY20 over FY19 along with low demand for government bonds due to excess SLR in the banking system. This could put upward pressure on yields at the longer end. Hence, we believe that exposure to debt markets should be taken through the short term to medium term debt funds with a high-quality portfolio.

As per My understanding we should add following schemes or add money if you already own this schemes. 

Mutual Fund Schemes 

1. ICICI PRUDENTIAL BLUECHIP FUND

2. KOTAK SMALLCAP FUND

3. IDFC Sterling Value Fund 

4. L&T Emerging Businesses Fund 

5. Motilal Oswal Multicap 35 Fund 

6. Nippon india Multicap Fund

7. Kotak Standard Multi-Cap Fund

8. Tata Equity P/E Fund 

9.  Edelweiss equity opportunities fund

10. Franklin india focused equity fund

Happy Investing!  

 

Thanks a lot for your time and allowing us to stay in touch with you. All of us at Tejas Consultancy are grateful for the opportunity.

Please Call us for any assistance you need for your Investment and Insurance needs.

   

    

 

 

 

      Allaudin Bldg Shop No 1,Manchubhai Road,Malad East,Mumbai - 400097.

      Shop No.9,Param Ratan Bldg,Jakaria Road,Malad West,Mumbai - 400064.
      Tel:28891775/28816101/28828756/28823279. CELL:9930444099  www.tejasconsultancy.co.in |        E-mail Us: ritesh@tejasconsultancy.co.in

Disclaimer:

This emailer is addressed to and intended for the investors of Ritesh Sheth & Tejas Consultancy only and is not spam. You are advised to contact Ritesh Sheth & Tejas Consultancy to clarify any issue that you may have with regards to any information contained in this emailer.The views are personal. Ritesh Sheth & Family or Tejas Consultancy does not guarantee the accuracy, adequacy or completeness of any information in this emailer and is not responsible for any errors or omissions or for results obtained from the use of such information. Ritesh Sheth & Family or Tejas Consultancy does not have any liability to any person on account of the use of information provided herein and the said information is provided on a best effort basis. In case of investments in any of our schemes, please read the offer documents carefully before investing.
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Better financial year of FY 17.

All of us at Tejas Consultancy wish you a better financial year of FY 17. I sincerely hope that the subdued expectations all around has room for positive surprises due to the many small things which are falling in place.

key calls for the markets in FY 17 are:

1.A range bound equity market at best.
2.Long short /Absolute return seeking strategies will continue to outperform relative return strategies
3.Muted returns from duration play on Fixed Income
4.Higher Gold prices in rupee terms
5.Stagnant residential real estate prices
6.An increase in commercial rental yields
7.Stronger dollar and weaker EM currencies
8.Stagnant to lower commodity prices

We hope that we are way off the mark on all the above counts and that can only mean that

1.Global demand has revived even despite its current low probability
2.Domestic earnings revival is led by rural demand and the 7th pay commission effect and outweigh the possible slack on the exports side of the economy
3.Inflation collapses and / or Government meets with its fiscal deficits leading to higher bond prices.
4.Personal savings revive enough to bring forth household leverage, that’s required to revive the demand for real estate.

Going forward, under stable market conditions we expect the our recommended portfolio to continue its out performance given the higher earnings growth differential.

Request you to pass it on whosever can benefit from it.