The Signal – Markets Have A Story To Tell

The title of this piece must have tickled the skeptic in you, just like everything else 2020 has had to offer so far! The fears, while many, dons a big voice when talking about health – both, of the body, and the bank. 

Let us at Fisdom, your beloved financial caretaker, alleviate the financial fear, by questioning and breaking-down the skeptic fervor, and make some room for much-needed optimism.

The Rise of The Skeptics

Nearing the 9th Month, COVID headlines are now emblazoned at back of everyone’s brain. The viral virus landlocked the world, both, literally and economically, in a fashion never seen like before. 

In wide-spread panic, Fear acclimatized itself with investors, global and domestic alike, with them dumping equities overnight, and rushing for rejuvenated belief in safe-haven asset of Gold. Riddled with all-time high volatilities, indices wiped out trillions in a matter of 2 months, witnessing their biggest drop (-~40%) in 10 years to in a matter of 4 months.

The Fall of The Skeptics

As March rolled around, the skeptics volumes amplified, rising high and quick, but dampened even quicker. The painting of the full story tells us why. Have a look!

As can be seen, if the 1st 4 months of 2020 were about falling, the next 4 were about getting back up! Now, this naturally raises the question about where we go from here!? But we first ask you to analyze how we got here!

The current market levels, while nearly half-way there, still have half-way to go! But are we really half-way there?? Reading in between the lines (where the real details lie!) tells us otherwise!

As can be seen, much of market’s magic run has come from within its top performers. The index ex-Reliance alone, would have returned ~10% less! And that speaks volumes about how today’s levels are more representative of stock-focused gains, than a more holistic picture! This presents good news, for now we know the unrealized upside potential markets still have to offer! So, what are you waiting for? Get in touch with us, and let’s draw you up a smart and savvy fiscal approach!

Nation’s Pedal-to-the Metal: Growth Gears in Motion

As the optimist in you takes shape, let us add fuel to the fire, so we can merit what is to come, and abandon what’s happened. There are 3 key components which we feel will mute short-term pain, and welcome faster-than-expected growth. They are as follows:

• India’s Economy In Prime Position – Revving & Roaring

4 times since 80’s, US recession with falling US bonds, and, crashed oil prices has been followed by a strong Indian economic recovery. In fact, India has NEVER witnessed an economic recovery without a US recession preceding it! 

Today, we have – US recession, smashed crude prices and falling US Government bond!

As Economies Open up, India oils up its pillars of growth, oompahing India’s ability to deliver to investors and citizens alike!

• Sanctimonious Synchronization between the Govt. and Central Bank

Pictures say more than words, and the 2 graphs above do just that. The relief package (10% of GDP), at time of announcement was the 5th highest in terms of value across the world! A mix policy and credit guarantees, the package was widespread like an umbrella, ready to tackle financial issues of any kind!

The actions of the Centre were supplemented by its banker, the RBI also, recently declared a 50K+ Crore dividend to the govt. (3+ years in a row, now!) bankrolling it’s announcements, and putting money where the mouth is!

With Centre and bank taking front-foot, any external pressure, may not stand long! The catalyst to welcome faster growth is the nation’s magnetic macros, with Forex reserves standing at all time high, and seeing growth like never before! Pushing current account to a surplus, the reserves can cover India’s import bill of more than one year!

Investor Takeaway

Investing is a hiccup-full journey. COVID 19, after the last 4 years, is another speed-breaker that markets will tide over in the medium-long term. Sure, it will bear short-term pain, as is seen in the health of growth indicators, and contractions of powerhouse economies. But where there is a problem, there is an opportunity. It all depends on how you see it.
As economies continue opening, the room for growth gets an extra leg to stand on. As the economy learns to walk again today, it does so with a focus to gallop tomorrow.
If you want to yield the results of tomorrow, you got to act today.

We, at Fisdom, eagerly await your call to help you define your tomorrow. Here is your chance to grow with your motherland!