INR has been continue to depreciating against USD and other major currencies. Equity markets was also volatile and scores of stocks touched year low or all time low. This is what creates investment opportunity to struck gold in the haystack.
It is time when most of the investors are fearful about uncertainty associated with growth in the economy, indecisive government and impending elections. However, if you notice we have overcome these and other uncertainties over so many years and here we are as top 5 global economy of the world. No doubt, head winds are there, but we shall surmount them in long term.
Another thought which investors would appreciate that equity investment held for more than one year is exempted from capital gain tax while less than that attract higher tax rate. Thus from tax perspective also, it makes sense to invest for long term.
Well, now it makes eminent sense to start investing systematically to take advantage as valuation is now getting attractive. There are two ways to capture this event:
1. Simple and straight forward method is to invest in index equity mutual funds. This is cheapest and best way to own top business of the country. In addition, you can eliminate the bias of fund manager if you choose to invest in actively managed equity fund. Pl exercise caution while investing in Sector / Theme based equity mutual fund as they are flavor of season and you should be alert when to enter and exit.
2. Direct invest in Equities : Here one has to study companies in terms of business model, competitiveness of the business, corporate governance etc. and top of that Valuation. One can develop these skills by mastering reading annual report of the company and other available resources in public. Thus companies available cheaper would be candidate for investment.
Happy Investing ...
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