Strength in dollor giving sleepless nights to emerging markets and for investment community this is not a new phenomenon.
Even in 2013 we have seen ruppee depreciation.
Increased trade deficit
Increased interest rate in USA
Increased import thanks to crude prices rise and drought
Fear of Poltical instability
All these factors contributing to ruppee depreciation.
Economies and markets cycle up and down.
Whichever direction they’re
going at the moment,
most people come to believe that they’ll go that way
This thinking is a source of great danger since it poisons the market ,
sends valuations to extremes, and ignites bubbles and panics that
most investors find hard to resist.
Likewise, the psychology of the investing herd moves in a regular,
pendulum- like pattern—
from optimism to pessimism;
from fear of missing opportunity to fear of losing money
and thus from eagerness to buy to urgency to sell
But as an investor this kind of economic situation always prevails.
EACH year you have seen something big danger for investors being broadcasted over business channel but still many people made money, even some of you have made.
In such situations what to do
Investors can invest in export oriented companies
Investors can invest in sectors which growth depend on domestic market
Like consumption, Nbfc, infrastructure and its ancillary sector.
The swing of the pendu-
lum causes the herd to buy at high prices and sell at low prices.
part of the herd is a formula for disaster, whereas contrarianism at the
extremes will help to avert losses and lead eventually to success.
THE WORLD IS NOT AS BAD AS YOU THINK