Where to invest?

Many people have been asking me this question. I thought I will wear the hat of an investment advisor in US and look at the world markets and see what to do. So here it is. Not too useful I am sure, but here it is:

1. All Central Banks are printing notes – so inflation is a given. This normally means people will bail out of paper assets (bonds and shares please excuse)

2. Developed countries will grow at a pathetic rate or de-growth is a distinct possibility. So they will concentrate on emerging markets.

3. If people dump paper assets they will pick up commodities (default option or TINA – there is no alternative option).

4. Economies benefitting by commodity upswing are Brazil, and Australia for sure – so their currencies will gain the most – partially thanks to the commodity boom and partly due to the cash going into their economies from all over the world.

5. India and China are good growth stories but the Indian IT story has a comma if not a full stop. Once a Wall Street favorite, WS has cut down if not completely stopped the IT engagement – and WS will react to that. The Indian story without the software portion is quite insipid. The big hit on the dominant partner (for India and China) – US- is likely to be felt in the growth stories too.

6. Weak developed markets, weak currencies, high commodity prices (read oil for India)  are all bad news for Dalal street. So start….I think this is a dead cat bounce, not a bull run.

Caveat: I have no reason to want a bear market, however am under no pressure to keep saying we are in a bull market either! However many big investors – Mark Mobius chief among them – have been calling this a ‘genuine start of a bull market’. I do not know what they think, but most people I meet are worried about their jobs.

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