Markets are at an all-time high. What should I do?
Have you checked the markets?
I bet you have!
After all, in the last year, it has moved from 61,773.78 to 75,428.25 (at the time of writing this article).
A return of 22.10% in just one year!
Isn’t that awesome?
And that is not all!
The BSE small-cap 250 Index returned 57.68%!
Yes, that’s right, 57.68% in a year.
The market has been moving upwards for quite some time now.
The BSE Sensex has moved from 39,434.72 to 75,534.14 in the last five years (13.88%).
The only significant fall we see is in 2020 during the COVID-19 pandemic.
You may be wondering…
Why is the market going up? What are the reasons for it?
Well, the top five reasons are…
1) GDP of India: India’s forecast for GDP in 2024 is 6.5%, which dwarfs anything that is on offer in the West.
2) The government has implemented wide-ranging economic reforms, including liberalising foreign investment, launching the United Payments Interface, and emphasising infrastructure spending.
3) Youthful demographics: India is a hub for an ambitious and ready-to-work young population (65% of India’s population is below 65).
4) Economic stability: India’s macro factors are better than all the major economies worldwide. Our inflation rate was 4.83% in April.
5) Domestic inflow: India is becoming self-resilient. A few years ago, our markets used to react drastically to the FII (Foreign Institution Investors). But things have started to change. Our DII (Domestic Institutional investors) and retail investors drive the markets.
The list goes on…
But I am sure you get the picture.
Now that we have answered the first question, the second is…
What will happen now? Or the colloquial term, “Market Kya Lagta Hain?”
Will it keep going up, or is there a correction down the road?
Honestly, no one can predict the markets!
I know it is not the answer you would be expecting.
You wanted some reports, numbo-jumbos, and quick formulas to help you predict what will happen, right?
But trust me, that’s not how things go.
Predicting the market is like gazing into a crystal ball and trying to interpret the future.
But what I can tell you for sure is that India will grow. I have no doubts about it.
There will be minor blips (as seen in the image below), but the market will move upward over the long term.
(Source: Kotak Mutual Fund)
Please keep your dreams in mind and ensure you have an action plan in place.
That’s all that is required.