2021 was the year of recoveries for economies, companies, and people. Next year promises more along the same lines. What are the top stories that spring to mind?
The healthy pace of vaccinations is welcome. Interest rates continue to be low, Sensex, in 2021, moved up 19%. Diversified equity funds across categories did well. Debt Funds continued to give lower returns, Interest in CryptoCurrency spiked. US Equity markets continued to show strength. Emerging technologies like 5G, Metaverse, and cybersecurity look like good opportunities for fund managers. E-commerce grew by leaps and bounds.
India looks poised to do well in 2022. Modi’s reforms over the last seven years are directionally positive. Urbanisation, Infrastructure, Manufacturing are seeing phenomenal growth. After a lull of 8 years, India’s property market is looking up. Many businesses that were hit hard in 2020 recovered smartly. Automation, Digitisation and the use of technology are increasing.
Our expectations for 2022 are optimistic. Thanks to increased consumer spending and demand, GDP growth should pick up further.
The outlook on inflation, interest rates, earnings and valuations say it’s a good time to stay invested in India, a less good time to be in bonds, and the right time to protect your portfolio with some diversifiers like gold and international equity. We expect a return to moderate growth in 2022, which we think will still be above the trend average.
It is hard to predict with absolute certainty how markets will behave in 2022. Our conviction is that India’s structural growth trends will do well and grow your investment portfolios steadily over the medium to long term.
Last but not least, We take this opportunity to wish you a happy and prosperous 2022. We look forward to helping you plan well and live better in 2022. And beyond.