Thrust on Financial Savings Continues
Investors holding back should invest now, can use dynamic funds to beat volatility
Given the balanced stance taken by the government when the FM could have been populist, we believe there is scope for equity markets to re-rate from here. Also, there is a possibility of increased inflows from domestic investors in the near-to-medium term and valuations are likely to expand. In terms of earnings of India Inc., there will be challenges in several sectors, but the low-interest-rate environment will prove to be a major positive.
Additionally, the government has provided impetus to the infrastructure sector, with enhanced funding for the transportation sector as a whole. We believe this is one sector that is likely to see increased interest from investors in the near-tomedium term. To make the most of the infrastructure story, an investor can consider infrastructure funds.
For investors on the sidelines, my advice would be to invest right away. This is with an understanding that there may be a case for intermittent volatility in the near term, due to uncertainties in the world economy. Hence, the best way to circumvent such volatility would be to invest in dynamic asset allocation funds.