The opportunity window is open.
Are you still wondering if it is a good time to invest in Indian equities? Or, are you waiting for the best time? Well, the answer to the wait lies in finding ways of ending it. But, ending the wait should be done responsibly. Most investors who end long years of waiting to invest, do a hurried mess of the actual investing. Allocation of money, researching of ideas and making of choices happens in a hurried and haphazard way. This tends to defeat the very purpose of waiting. Returning to the markets should be done in a sensible and measured way. 2012 was a great year to make a measured comeback to equities. But, investors seemed too wary of the idea. 2013 started on a confident note and investors seem to actively entertain the thought. But, the thought needs to translate into action. Importantly, when the investor chooses to start early, he gets time to research options, take decisions and build equity portfolios. Investors relying on advisors need to know an advisor should also be given the leeway to act without pressure. Investing regularly and building your book in 2013 will give you the luxury of leisure when your decisions start paying off in the subsequent years. Waiting now will do little but add to the pressure and that will lower the quality of your investing.
When you rely on sentiment over valuation while making decisions, opportunity is mostly lost.
The currency impacts stock market sentiment like never before. The fluctuations in currency make and unmake returns for global investors and FII’s. Global investment flows are determined as much by the currency’s stability and attractiveness. Investing is not simply about corporate performance and supporting economic data. The currency’s valuation is what helps investors make up their minds. Global Investors brought in significant monies when the Rupee hit new lows in 2012. The thinking seems to be that in dollar terms our markets are significantly cheaper than they were in 2008. The rupee’s stability is critical for global investors to place faith on Indian equities. The coming weeks will show how FII’s view the rupee and place bets on it. After all, betting on Indian equities is as much a bet on the rupee. Importantly, reforms will guide every move in the stock and currency markets.
Time to do strategic investing in equity. Tactics can wait.