Tribute to Philip Hughes.... learning experience and off course markets.

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Tribute to Philip Hughes.... learning experience and off course markets.

What an end Philip Hughes, the young Australian cricketer got! A person who ate, slept, dreamt and lived 24x7 for cricket; the same sport that took his life in a freak accident. Can’t digest this event. His team members and country will miss him in this world cup.  We will soon forget this and move on but some lessons to be learnt. We need to be prepared mentally / physically / financially for such events in our life.  We always think it cannot happen to us but reality is that it can strike any time to anyone, anywhere and anytime. Easier said than done.

From Market perspective every trader and investor needs to be well prepared for such events. What is going to hit you, when and by how much all these parameters are pretty unpredictable. What is predictable is your action at that time.  To mitigate such a risk up to certain extent one could keep a balance and diversify their portfolios with a mix of equity /commodities/ fixed income and real estate as per the risk profile of an individual.

It’s been a dream run on Nifty since Feb 2014 from 6000 levels to 9000 in 12 months up nearly 50%. Markets have been defining all the parameters and the Newton law of gravity but that’s what market is all about. Expect the unexpected.  Who in the world would have thought of oil below 50$ in matter of 3 months from the100$ level. It’s a blessing in disguise for India.  In market Language Indian economy received one is to one bonus, first the dynamic Modi as PM and now crash in Oil price. Hope both do not disappoint us in future.

Result season which was pretty bad across the sectors except few like IT and pharma validates: all is not well on the ground or say it’s very bad. BJP losing in Delhi would have shaken up Modi – Shah Combo and wakeup call for the centre. Perform for perish as now the Indian citizen cannot be taken for ride.

There are good chances that the market will take a pause / correct and move sideways for some good time say for 3 – 6 months unless we see a path breaking budget from FM. We are discounting corporate earnings on 2016 / 2017 which carry high risk in this uncertain environment across the globe. Return expectation will have to be lowered and time horizon for investment will have to increase.

No doubt India is on the path of recovery, India will remain the preferred investment destination and those invested with well managed companies will able to capture this turnaround and will benefit immensely.

Wishing all the best to both the captains of Team India for Feb: MS Dhoni and Arun Jaitley!!!!

Happy Investing

Premal Sanghavi of Vama Financial Services