Year endings are riddled with a peculiar paradox. They may reek of despair over a perturbed past, yet are redolent with hope for the future. They may be saddled with banalities springing from hindsight, yet shimmer with possibilities stemming from foresight. As we straddle the divide between 2011 and 2012, the financial world is beginning to sniff out these contrasts.
The investors are rumbling with resentment over a year that has landed them losses, but are calmly cautious about the profits they may make in the coming year. The players in the investing world-stock brokers, fund managers, realty developers, insurers-and the industry are grim about stunted growth, but are sanguine about stability in the domestic market.
The widespread dismay has been no surprise: in the past year, the Sensex has taken a wild ride, losing nearly 25%, and drumming out thousands of crore rupees worth of losses for investors; the rupee depreciated 18.5% against the dollar in 12 months, plunging from `44.71 at the beginning of 2011 to `52.96 now; the inflation surged to 10% in September before falling to 9.11% in November; the interest rates scurried up with an unseemly haste as the RBI tried to combat inflation; gold prices shot up to unnerving highs as global central banks acquired it and the rupee weakened; the IIPfigures registered a negative growth of 5.1% in October; and the European debt crisis, along with high inflation and interest rates, threatened to unravel the domestic growth, with the GDP figures falling consistently in the past six quarters. It was a whorl of factors that conspired to crumble a sturdy economy.
Still, there were islands of sanity. The debt instruments-debt funds, fixed deposits-ensured good returns spurred by the rate volatility. The rupee that weakened against the dollar benefited many an export-oriented industry. The regulators sprung into action to safeguard the small investor; so the NAV-guaranteed Ulip came under fire, and medical insurance portability finally took off. The bank savings rates were deregulated and, in a radical measure, the safe haven of small savings schemes was linked to the market. The gains were not substantial enough to sate the greedy investor, but steady enough to soothe the fearful one.
As we prepare to shift gears and sidle into the next year, is the financial course likely to change? Will the investor have to content himself with a measly trickle of gains and reconcile to another year of gloom? Or is there a sliver of revival stuck in the recesses of 2012? Should the investor stick to the safety of debt or venture into the swirling equity market? Should he retain the existing assets in the same proportion as last year or must he shuffle these around to optimise gains? Should he pick property as interest rates prepare to descend or wait for the real estate market to recover?
The investors are rumbling with resentment over a year that has landed them losses, but are calmly cautious about the profits they may make in the coming year. The players in the investing world-stock brokers, fund managers, realty developers, insurers-and the industry are grim about stunted growth, but are sanguine about stability in the domestic market.
The widespread dismay has been no surprise: in the past year, the Sensex has taken a wild ride, losing nearly 25%, and drumming out thousands of crore rupees worth of losses for investors; the rupee depreciated 18.5% against the dollar in 12 months, plunging from `44.71 at the beginning of 2011 to `52.96 now; the inflation surged to 10% in September before falling to 9.11% in November; the interest rates scurried up with an unseemly haste as the RBI tried to combat inflation; gold prices shot up to unnerving highs as global central banks acquired it and the rupee weakened; the IIPfigures registered a negative growth of 5.1% in October; and the European debt crisis, along with high inflation and interest rates, threatened to unravel the domestic growth, with the GDP figures falling consistently in the past six quarters. It was a whorl of factors that conspired to crumble a sturdy economy.
Still, there were islands of sanity. The debt instruments-debt funds, fixed deposits-ensured good returns spurred by the rate volatility. The rupee that weakened against the dollar benefited many an export-oriented industry. The regulators sprung into action to safeguard the small investor; so the NAV-guaranteed Ulip came under fire, and medical insurance portability finally took off. The bank savings rates were deregulated and, in a radical measure, the safe haven of small savings schemes was linked to the market. The gains were not substantial enough to sate the greedy investor, but steady enough to soothe the fearful one.
As we prepare to shift gears and sidle into the next year, is the financial course likely to change? Will the investor have to content himself with a measly trickle of gains and reconcile to another year of gloom? Or is there a sliver of revival stuck in the recesses of 2012? Should the investor stick to the safety of debt or venture into the swirling equity market? Should he retain the existing assets in the same proportion as last year or must he shuffle these around to optimise gains? Should he pick property as interest rates prepare to descend or wait for the real estate market to recover?
We realise that you, our readers, have been plagued by these, and many more, questions in the past few months. This special year-ender issue is an attempt to answer some of them. We shall evaluate the past to render a clearer future. We shall sift through the remains of 2011 in different asset classes-stocks, mutual funds, real estate, insurance, gold-and assess how these will shape up in 2012. We shall present the opinions of various experts to settle on a strategy you should adopt in the coming year. We shall glean the important lessons of 2011 so you can build robust finances in 2012.
While it's impossible to shovel out a clear path, it's evident that 2012 will be the year of the proactive investor. If you are prepared to be on your toes as global and domestic events unfold, monitor your finances with vigour, and pore through the advice we render, we assure you of a stable ride. And, hopefully, you may not need to grapple with sundry paradoxes as you end 2012.
Disclaimer
Information, charts or examples contained in this mail is for illustration and educational purposes only. It should not be considered as advice or an endorsement to purchase or sell any security or its financial instrument until you are well conversant and confident about the movement.
For indiviual guidance please write to me seperately at zoherdoctor@gmail.com
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