Everyone is curious to know how 2014 will span for investments. Its totally wrong to predict about markets or the economy. Lets look at whats happening and gauge what will be in store for 2014.
There has been a positive environment for stocks in general worldwide. Inflation pressures are generally falling(in India too onion prices are no more headlines. Hopefully vegetable prices will calm down) We are currently in the equity friendly recovery phase, global growth is getting stronger with fiscal drag lightening in US. Growth is seen in Europe and UK too. We know eyebrows may be up with this statement! Any initial recovery is always doubted?
There is strong activity in Japan, good news is monitory policy continues to be loose. Chinese economy is relatively growing at slower pace which is keeping the commodity prices lower. Central banks liquidity is good for equities. Last time in 1990s similar situation created a BULL rally which lasted for 7 years. In the US the equity markets have been trending higher. US will eventually taper and reduce the money printing which is going on from past few years. This prospect is strengthening the $ dollar.
Japanese stocks will do well when the dollar is strong because Japanese exporter will get better profit margin. We had recommended US equity fund in early 2012 and most of the clients who participated have been immensely benefited. We believe global equities offer growth potential in the coming year too. Do check with us to know about this.
Coming to India the markets have recently moved up with liquidity. Fifteen year average GDP of India has been around 7.4. Current GDP is around 4.4. Investments done when GDP is low has always given good returns to the investor. Fundamentals will improve with RBI’s measures. Political uncertainity and election outcome will decide future course. Election should not be used as a speculation or sitting on fence. Stick to the Financial Plan and keep investing in well diversified Geography.
In conclusion Outlook for 2014 is much more positive than the year gone by. We hope 2014 brings more cheer to your money and to your life. Here is wishing you a Happy and Prosperous new year.