What makes equity a good buy at the current PE? Is it justified at all?
Well in life either you need a sale or a story to tell. Since you cannot tell a story every day, you need to sell. To sell you need a story which is easy to believe. Well easy for the end investor I mean. He has to justify to his mind and his wife’s mind that equity will out perform debt, gold, copper, aluminium, real estate,….and therefore equity (direct or mutual funds) is a great buy. How do you justify the current prices? Is that easy? well, hear….
- Sip is good at any starting point if you have patience (yes it has moved from 5 years to 22 years, but that’s beside the point)
- Govt. will be in a liberal giving mode from Sep 2017 preparing itself for the 2019 elections
- The 2018 budget will be very liberal hoping to swing the next election
- We have still not discounted the UP victory and the 395 seats that NaMo will get in 2019
- Our current leadership in the country and many states is fantastic
- Ease of doing business in India
- If you do SIP you cannot EVER lose all your capital
- Mid caps can and will be at a premium to large caps (oops we are getting more money in midcaps, need new theory)
- As more people come under NPS, the money going into the indices keeps increasing
- Indian fund managers are geniuses they will continue to get alpha permanently – well at least for the next 224 years
- Our investment penetration is still poor, and we could easily double the sip numbers and the average amount of SIP
- look at the number of JanDhan accounts, all are potential sip investors
- GST implementation will mean GDP will go up by 2%
- Weakening US means more FII inflow
- Every mutual fund is able to increase its aum..so market has to at least double in 5 years
- look at the dividends that the psu shares are paying…all that cash will come back into the equity markets
- SIP always works
- look at the number of relationship managers – all are selling equity SIP which means that much more cash for fund managers
- look at the number of ULIP being sold
- with such aggressive buying by the average middle class markets are bound to go up PERMANENTLY.
Welcome to the world of the perma bull ……….its paradise out there..
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