Don’t get me wrong guys. I am not against our country.
If one was to take the current national mood (as suggested by opinion polls) and mediaproduced content as dependable indicators of election results, there are decent chances that India might get a strong and stable government.
Indian Elections 2014 – To decide course of markets for next 5 years
Who would it be?
I don’t know. And atleast for this post, its immaterial which party or alliance it is.
But before I tell you why I want Indian elections to fail, I want to caution everyone.
What I Am Concerned About…
In last 6 months, Indian stock markets have made new highs and moved up from 19,000 to a new high of more than 22,000. This means a good 15% increase in less than 6 months!! And if one thinks carefully, it has only been in last 6 months that various political parties have become ‘electionally’ active.
Fundamentally, almost nothing has changed apart from Rupee appreciation.
So as far as I am concerned, this rally is fueled mostly by hope and people’s expectations.
And there is nothing wrong in being hopeful and optimistic about a strong leader. But to think that someone has a magic wand and would change everything with the word go is like… being very unintelligent.
People have already started talking about newer and bigger targets like 40,000 for Sensex.
And headlines like the below ones have become very common
Common Newspaper / Online New Site Headlines
Let’s be a little rational, if not wise.
Stock Markets are riskier when moving up. And as of now, markets are moving up pretty fast.
A number like 40,000 or 42,000 is not unachievable. And it is possible that it might happen over the next five years. But stock market history bears witness that whenever things get a little too optimistic, and markets run up without any improvement in fundamentals, there is a reversion towards the mean, which means…
And gods forbid, if the new government is unable to deliver on its promises within the first year, the markets would definitely overreact and start grinding down.
Why Do I Actually Want These Elections To Fail In Giving A Clear Majority To Anyone…
Once again, don’t get me wrong. I am not against our country. But I am an investor too.
Anyways the government would be formed. But in case there is no one with clear majority, then markets would not take this as good news.
And that is what I like. Markets go down because of bad news or because of absence of good news. So to bring sanity back to Indian markets, it would be a good correction to have. And for long term investors, what better can happen than a decent correction?
A Good Financial Advisor can be the difference between meeting or missing your financial goals. For all your Financial Planning & Investment Advisory requirements, Talk To Us. Or simply Apply for Financial Plan.