There is no alternate to adhering to good economics. If sound economic practices are violated, the impact on societies will be profound. In such situations, societies will respond with alacrity. The message from Brexit is strong and loud for politicians and governments who underestimate the power of the people. The people are ready to face the economic costs of a tough decision. What is the message for India from Brexit? The message is to pursue responsible economic policies, maintain fiscal numbers within an acceptable range, improve competitiveness constantly and to pursue balanced growth between Urban and Rural India. India has been on track to achieve these objectives during the current regime. While outcomes could always be better, the directional focus is right and we should work constantly towards better outcomes. Indian investors must understand the merit of what we are doing now and believe in our economy. The benefits of following the right policies will be more pronounced in times like these when the world is punishing nations who don’t pursue them. India is definitely on a good wicket with respect to its economics and political will. What we need now is for our people to show greater conviction in the economy. The stock market would be a good place to show such conviction. The potential benefits will make deep conviction worthwhile.
How we invest during volatility decides how much we return during euphoria.