If you would have read my previous post on Economic Updates and how it affects your investments, I did mention that the best time to invest is when situations around us are not positive. When every one is crying wolf, it is the time to go shopping for deals. And it is really easy to identify when people are crying wolf. You don’t need to go any where. Our news media does this job perfectly well and lives up to expectations. This article is just to show one example of how headlines can give you those indications. I have pasted a screen shot of the today’s news headline on moneycontrol.com.
Please do note that I am not demeaning the quality of news being published by our news media. I follow them very regularly and take them objectively. They are doing their job of providing facts and opinions of experts. It is easy to identify negativity by just reading the head lines. An average investor will get scared and would rather keep their money parked in bank accounts and fixed deposits waiting for the right time to invest in long term assets like equities. They follow the news articles to find the right time to invest when situations look good. But isn’t that too late. By the time the good news hits the press, the opportunity to accumulate assets at rock bottom prices is lost.
What would you do reading such news articles in the press ?
4 Replies to “Scare Mongers – As Expected”
Agreed! India will now enter its modern era recession as USA did in 2k8. If you have some money… Wait till stocks hit rock bottom and then go on the wildest shopping spree of stock .. Like a dream! The ones with guts and funds… Will win !
I have not invested in stock market before and planing to invest a good proportion of my savings. Do you think this is a good time to enter or should I wait for few months for the prices to correct ?
If all depends upon your investment time horizon. If you can invest for 5-10 year horizon, then you can invest at any time on a regular basis. If you are NRI, it makes more sense to invest via Mutual Funds in India. They are more cost effective, easy to invest and offers functionality to invest via SIP.
An excellent commentary by Shankar Sharma from First Global – article from Economic Times.
“The US economy is growing at 1.5-2%, people find that to be a terrific growth. That is rubbish. You have pumped in $4 trillion plus subsidies by way of almost zero interest rates and after all that, you clock a growth of 1.2-2%. Therefore, there is no growth in the world. You are just trying to artificially stimulate a dead patient.
Let us adjust our targets down. If that does not happen, we will keep blaming Manmohan Singh and Chidambaram and hoping that a messiah called Mr Modi will solve all the country’s problems. There is a genuine problem everywhere in the world as far as growth is concerned and in my view, India has done an excellent thing by not having busted our national balance sheet in chasing growth.
Every country of size or substance in the world has busted its balance sheet. Europe has completely tapped its balance sheet out. The US and China have done the same. India has grown 5.5-6% or we will grow about that much without busting the debt equity ratios for the nation. In my view that is a terrific quality growth.
If you spend a billion and grow 10% and I spend zero and grow 8%, which is a better company? So how come we have forgotten all our corporate finance and security analysis principles when it comes down to analysing the country? Everybody writes the obituaries about how bad the country growth is, without looking at the fact that we are growing 5.5-6% without spending any money. China is growing 2.5% with an out of control debt market, so is the US. In my view, hunker down your expectations to bring them in tune with the reality of the world today.”