JUST BUY INDIA !…GO LONG FOR THE LONG TERM….AT 202 % IT TOPS THE WORLD IN EQUITY RETURNS OVER 5 YEARS!

 

COUNTRY COMPARISON

 

FIVE YEAR EQUITY RETURNS FROM 2004 to 2009

 

 

Sr

 

Country

 

%  Returns

 

1

India

202

2

Brazil

143

3

China

112

4

Russia

82

5

South Korea

74

6

Hong Kong

50

7

Singapore

31

8

Spain

21

9

Germany

19

10

Australia

12

11

New Zealand

4

12

United Kingdom

(5)

13

France

(16)

14

USA

(19)

 

BRIC Countries have cornered the Top Four Positions in Equity Performance over past Five Years…and the 21st Century is relatively young

It’s the exciting combined Dynamics of our Classic Pyramid Demographic Profile and the freeing up of our Markets through the continuing Reforms that is unleashing the Power of India and reflecting in this superlative Equity Performance

Clearly there is a techtonic shift of economic power happening from the West to the East…and the excitiment is that this will sustain for decades to come in this century

I shall blog later in detail on the demographics of India…but I can give you a feeler now….Our Country is Young….Around 350 Million are below 15 years of age…that’s nearly one/third of our population…..Nearly half of our Population of near 1.2 billion is below the Age of 25…two/thirds,around 750 million are below the age of 35….and we should see the pace of economic reforms pick up fast with the Congress getting a clear election mandate

India is the place to be…it has begun to play out the twin growth propulsion drivers of Huge Infrastructure Developement and Surging Domestic Consumption

Short Term Adverse factors like Drought situations,Falling Exports,High Fiscal Deficit,FII Outflows and Stretched Valuations should not cloud  or adversely influence your Bullish Long Term View on India….GDP Growth rates are expected to recover to 9% by early 2011

So a safer strategy would be to hold a Long term view and take opportunities to buy on significant corrections as adverse short term factors play out their poison,rather than short the Nifty or the Sensex

Stay Invested in Indian Equity…Get Invested in Indian Equity…Increase Investments in Indian Equity

On a macroview,our Sensex,currently just under 16000,up from a low of 8000 in March this year,will not only cross the January 2008 Highs of 21000 in a year or two ,but move past 25000 by 2012 and at 18% CAGR ( It’s long term average annual return) is scheduled to cross 50000 by 2017……You’ll have to live with high Volatility as Sensex can correct significantly before continuing it’s upward trend…so a passive Investment strategy to buy into the Index will make you good returns in the long term but may cause some heartburns in the short term

But if you want to beat the Index,then stock selection becomes important and a bottom up strategy,increasing exposure to low and mid caps may well define great returns…Stay true to your Risk Profile when you to take this increased risk and look for market inefficiencies for great opportunities  

 

JUST BUY INDIA…GO LONG FOR THE LONG TERM

3 thoughts on “JUST BUY INDIA !…GO LONG FOR THE LONG TERM….AT 202 % IT TOPS THE WORLD IN EQUITY RETURNS OVER 5 YEARS!

  1. Dear Gaurav,
    That is great news indeed! Passive investors like me will feel re-assured. There is a regulators’ perspective on it too-this is the time to bring in good governance and not cater solely to vested interests-they too must think for the long-run!

  2. Hi Pankaj,

    You don’t need to join my advisory for me to tell you to buy Larsen & Toubro…You must have this India Proxy in your long term portfolio…for others.I release ideas to clients first and then later selectively ease them on to the Blog…but what you must stay away from or sell,I tend to blog immediately…like the Austral blog today !

    Cheers !

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