A Tough Year Winds Down
There are times when investors misread markets and there are times when they fail to read markets and simply feel lost. 2018 was more a year of the first type. 2019 runs the risk of falling under the latter kind.
As US markets keep hitting new lows, investors in India are going to start feeling concerned about the impact of FII flows, interest rates, exchange rates, and FDI. 2019 is going to be a year which will start on a note of global concern.
But, the challenge will be to correctly position global concerns against domestic uncertainties.
Continuity of reforms is going to be a big market fear even as elections near. The economic language of the political parties and the socialist excesses which they may promise will rattle investors. These are the challenges we will need to face in the first half of next year.
The second half will be more material. While politicians talk socialism during elections, they switch to capitalism by the time they present budgets. Investors must learn to deal with this Hyde and Jekyll brand of messaging. The reverse flow of messaging must be dealt with maturely and one’s investment thinking must be well guarded.
In 2019, ensuring that prevailing insanity does not affect us is going to matter even more.