Countdown Begins

A very eventful investing year will soon be behind us. 2020 has taught us many things. Once again, the benefits of being a contrarian equity investor were emphasized big-time. More importantly, the need to be more diligent in debt investments is critical.

While defensive investing in FMCG, pharma, etc. has proved to be a fail-safe approach, betting on commodities has also shown us the power of sharp swings in sentiment. Clearly, there is no one way, investment philosophy, or strategy. One’s overall investment approach can be an amalgam of different approaches or dynamic enough to shift from one approach to another.

The global markets have shown tremendous confidence in equity as an asset class under the most adverse circumstances. It remains to be seen if this confidence will sustain as retail participation in stock markets is at its highest in this century. Usually, markets see sharp swings in confidence exactly around the time when it looks strongest. While December will see the residual bullish sentiments of 2020 playing out in the markets, January may see the spillover of the public mood.

Preparation for a very interesting investment year is absolutely essential. One can’t wait to begin! December is a great time to take stock, prepare, and project your investing towards a safer, risk aligned approach.