The question now is not if but when. We are talking of the Federal Reserve of America raising interest rates. While the Fed isn’t showing any hurry to raise rates, the slow paced approach will test the market’s patience. The markets will factor in an eventual rise in US interest rates. With interest rates set to rise in the USA, the global investment flows are set to see much greater churn. Monies flowing into emerging markets are certain to slow. The dollar’s rising strength will weigh heavily on the minds of US based investors. They may prefer their own markets over emerging markets like India. This is likely to cool things down in the global emerging markets. The froth in valuations is certain to settle down. Valuations will be overwhelmingly anchored to earnings than to sentiment. A phase of slow and measured investment action awaits.
There is no such thing called an efficient market. We only have efficient investors
