The value of our Imports (Top 3 - Oil, Gold, Electronics) far outstrip those of our Exports and hence India runs a massive CAD.
Oil is the key
With Oil hovering at 115-120 range, our prospects get dimmed on all fronts -
1. CAD - Current Account Deficit
2. Rupee' vis. a vis. the Dollar
3. Downward earnings pressure on companies - With the onset of the earnings season now, this will be a key factor to track
4. Inflation
5. Relative Nifty valuation vs. other EMs
Ser. No. 1 to 5 are inter-connected in myriad ways and are currently in a perfect storm.
Finally, till such time as the FII selling doesn't abate, there can be no sustainable & meaningful upside.
There will sure be up days along the way, but the point is that what is the overall direction of the market?
If you are a SIP investor or someone dipping toes in the market only now, it is a good time to make staggered investments.
However, if you are already heavily invested in the markets since a long time, we are not inclined to put the meagre .5-1% of incremental gun powder at my disposal into the markets, rightaway.
This market volatility is a traders paradise.
As an investor who is in any case 99% invested in equities only, there is no shame that I have in buying 5-7% higher onc the tide has turned; decisively.
Peace of mind is the most important thing to us, in life.
As they say - if head is safe you can wear thousand pagris means if capital is safe you can rebuy good stocks
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