We are in interesting times from a Macro Economics point of view. Covid panic led to stimulus, stimulus created inflation, higher inflation means higher rates.
In India INR in trouble after relief rally last month, G.Sec touched 7.44 couple of days back. So short INR and long IGB trade is back. Fed rate hike and rising dollar are main culprits.
RBI's market operations & forex interventions have reduced system liquidity.
We think RBI set to rise Repo rate by 50 bps in their MPC meet on 30th Sept as inflation is higher band and above RBI’s tolerance level.
In coming months G- Sec will touch 8% - 8.5% that would be a great opportunity to lock your money. In last 15 years, only thrice we got this opportunity. (2008, 2013, 2018)
Opening up china’s economy, Winter and Russia Ukraine war means crude oil will again. Move toward 100 - 100+ levels in coming months.
TAKE AWAYS
- If you are not a seasoned trader, stay away from direct equity trading particularly penny stocks, small and mid-cap stocks. Easy money phase from the equity market is over. If someone promises you 3% - 5% pm from equity trading, don’t trust him.
- Give your money to professionals. Like MF managers, after all peace of mind is important.
- Next one or two years, we are going to be in an accumulation phase. Increase your SIP or put Lump sum. (In drawdowns).
- Professional and Experience Advisor can add value to your investments as well as guide you according to your goals.
- Higher rates are here to stay for longer so prepare yourself.
- Check your Debt – Equity ratio Do proper asset allocation (Debt –Equity- Gold)
