The rapid decline in oil, over the past few weeks, has really mixed it up for the markets. Investors who took a certain view of the macros just a month ago when oil hit $85 are now forced to hurriedly review their position.
This must be quite harrowing as investment strategies tend to be in a state of constant cogitation. Investors are struggling to retain their conviction in the face of significant changes in macros. The adversity becomes too much to handle at some point in time. But, the calling for every investor is to identify sustainable conviction and stick to that.
The India story is basically intact, structural, and reviving. In this context, elections and temporary macro shocks are likely to be put behind convincingly over time. The challenge is for an investor to remain convinced when there is too much noise around him and when portfolios take a slight reversal in fortunes.
While the overall story is going to be great again, it is pertinent to note that the same sectors, themes, and stocks which rocked in the last bull run may not be the stars of the next one. This means that investors need to find newer ideas, themes, and stocks. The same challenge exists for a mutual fund investor too. Most investors have chased returns in mid-cap funds through 2017 and 2018. In 2018, only fresh thinking will carry the day for them.
As we spend the next few weeks waiting nervously for political trends to become clear for 2019, we should clear our own heads on the economic trends and winning themes of 2019.