Posted by:S. G. Raja Sekharan
2016 was a year of black swans – Brexit, Demonetisation and Trump – all these changed the investment landscape dramatically. Not many would have made decent returns in their overall asset base in 2016 – at least I did not.
Does 2017 look better?
Well the answer is a NO.
As of now, the risks are still there. Modi is still talking tough. Trump is expected to do the unexpected in 2017 (and beyond). And we still have to contend with a Chinese devaluation and Duetsche bank problems.
In such a situation, I would recommend conservatism.
Stay focussed on keeping your assets safe – do not lose money and live to fight another day.
In India, there are chances of further interest rate reduction – that means that Long term debt funds are a good bet to get 11-12% in 2017. But remember that here capital gains is taxed and so net of taxes the ROI could be around 9-10%.
I see the stock market in India not doing great at-least the first 6 months. Hence it is best to stay invested in good companies with durable moats and wait for the markets to go up in the future. Patience and adherence to long term investing principles is what I would recommend. I am investing in well run companies with moats like HDFC Bank, Page Industries, Marico, Gruh Finance, Asian paints, Pidilite. I am also looking at Bosch and Bharat Financials.
If you are investing in stock markets through the MF route, invest in MF's which have large AUM's.
Gold price movement is difficult to predict as of now. As I cannot predict, I would stay away from gold till there is some clarity.
Real estate will see tough days ahead. The real estate bill and the pressure from govt on benami properties will impact this sector. I would think one can invest in legally clean urban land - but beyond that, just be careful.
So these are my thoughts about investing in 2017. Not much, I know. But it is best to stay conservative and stay inactive and not lose money.
All the very best for 2017 – I hope you all have a great year ahead.