2010 had a been a year of opportunity for the investors in many ways. Zooming equities coupled with a very healthy economic environment created many opportunities for the investors given the fact that 2009 had been a year of mixed fortunes. At the dawn of the new year, Indian economy faces lots of challenges on the macro front. New year was rudely greeted by "onionomania" and the result has been a huge jump in the food price inflation. With the general economy in a reasonably perfect shape, factors like inflation and interest rates could play the role of spoilers this year. Overall the foreign fund flows have been healthy in 2010 and they are expected to flow more or less in a similar fashion this year too which means ample activity in the equity markets. Government is also expected to accelerate the IPOs of key PSUs this year which means lot of investment opportunities for the retail investors.
Consider these figures:
In the calender year 2010, the BSE Sensex rose 3,044.28 points or 17.43%. The S&P CNX Nifty rose 933.45 points or 17.94%. The BSE Mid-Cap index rose 16.15% and the BSE Small-Cap index rose 15.71%. FII inflow in the calendar year 2010 in dollar terms, touched a record $29 billion which has been a way higher than $17.45 billion in 2009.
So what does 2011 hold for investors like you and me....
In my opinion nothing changes, if one follows a well laid investment strategy taking a long term view of the Indian growth story. Sector and stock picks if done carefully and meticulously can yield substantial returns for the investors. But the fundamental aspect remains the same. One needs to have a well crafted investment strategy. Prepare a check list of your priorities and goals for this year and more importantly for the coming years which can help you prepare a good financial plan. The following inputs can add value in preparing your check list:
- Am I saving?
- Am I saving enough?
- Am I deploying the saved money in the best investment options?
- Am I spending the right way?
- Have I taken a comprehensive health cover?
- Have I taken a comprehensive life cover?
- Have I rationalized my debts?
- Can I retire some of them?
- Have I planned for my immediate and distant future?
- Most of all, do I have a clear financial plan?
Gopalakrishnan V
Founder and CEO
Lateral Consulting
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