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Tuesday, August 25, 2015

Are You waiting for "Green Shoots"

Dear Investor,

Yesterday the stock markets across the world fell 5-6%.For many it was the biggest single day fall in a decade or so.
On social media the picture of the big bull in front of NYSE lying on its side(apparantly shallow breathing)are trending!!
All the 'talking heads' on TV who till saturday felt unthreatened are all talking of the world going into recession.

You,the investor,what are you thinking?Will markets fall further and should you exit your portfolio which is in loss at present and wait for lower levels to buy back?Can one ever understand how far the markets will fall or rise?

Or are you waiting to see the 'green shoots' emerge before committing?

Believe me that by the time the 'green shoots' are visible the market would already have moved up.Unless you are so risk averse,in which case you should be adding to your Bank fixed deposit,this right now is to get in.

Get in.Not commit fully.The Current Account deficit(CAD) is under control,the Rupee looks not too worried,crude is below $40.

Yes China's trillions $ economy is a cause for worry.Yes Eurozone is having economic and immigration issues.Geo political tensions,terrorism,El Nino all loom on the horizon.

The business cycle will change in the next 2-3 quarters.Depreciated rupee will help exports - ITES,food items.

Be prepared to see the stocks you buy today or tomorrow fall another 10-15%,even 20%.Add more.Believe that World growth might come down from projected 3.3% to 3% but that would still be much above the recessionary zone of 2-2.5%.

The time to BUY & HOLD is upon us.