2019 To Be Much Better Than 2018!
Markets in 2019 look promising and in my view will behave much better than they did in 2018. With the new RBI governor taking office, I expect a change in the stance by the RBI. Some slightly market-friendly policies may be on the cards in the coming year. For me, the fall in crude oil prices is the biggest positive going into 2019 as it improves the trade deficit for India.
If investors are disheartened to see the gap in prices between the 52-week highs and the CMPs of a majority of stocks, I am confident that the stock prices in December next year for the broader markets could be impressively higher than their respective 52-week lows. The broader markets may as well lead in 2019.
The FIIs have turned out to be net buyers lately, and that has supported the Indian markets in the past couple of weeks, when almost all the other major markets have corrected noticeably. I expect 2019 to be a year when both FIIs and DIIs continue to buy Indian equities.
The cover story in the current issue takes a peep into how the year 2018 has been for the markets and also discusses the market outlook for 2019. India has been a world-beating stock market for 3 to 5 years now. The valuations are not dirt cheap for the Indian benchmark indices when compared to their global peers. The performance of Indian equities and global equities will depend a lot on how the USD behaves and whether the USD continues to strengthen or weaken in future. Investors will have to keep a close tab on what happens with the US interest rates and what action the US Fed takes on the liquidity front. I am sure you will enjoy reading our cover story, especially the market stats that we have shared. Do assist us with your feedback.
Often investors talk about investing in cyclical stocks versus non-cyclical stocks. In our special story, we have not only observed the merits of investing in cyclical stocks, but have also identified the ways in which investors can create wealth by investing in cyclical stocks. Do use the observations profitably and invest in cyclical stocks for the long term to create wealth.
Everyone is talking about how 2019 is going to be influenced by the national elections and its outcome. If the recent state elections have taught anything to us, it is that the market is not a slave of election results. Most investors want to stay away from the markets in the first six months. On the contrary, I believe the first six months could be ideal for investment as volatility will be on the higher side and long-term investors may get some good bargains during this period. So, my advice would be to focus on stock-picking and identify quality small-caps and mid-caps for the next year. Have a special look at the beaten down small-caps and mid-caps where the businesses are growing.
Invest for the long term, invest for growth!