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The colorful Portfolio

Post holi festival and before we say goodbye to the financial year, it’s the right time to add bright right colours to your portfolios and let your portfolios be a trail blazer to a resounding returns by the next financial year end. The mix in your portfolio could be the defense, infrastructures, banking and automobile sector and you would end in harvesting it rich in the coming years, because the order book position is going to swell, the debt on the books will have been taken care of and so also the balance sheet and the working capital will reflect positively in due course of time. It is quite obvious that the 90% of the returns are governed by the asset allocation and the rest is determined by the stocks and the bond picking skills, besides the timing which matters of course. Many investors are caught on the wrong foot or else they miss the bus and repent later.

Ups and the Downs are the part of the market, the markets surged in 2009 and then that was the best time to invest in the equity mutual funds but certain investors who had the hangover of the nightmares of the 2008 crash and missed to board the bus. So first of all one should not judge a product on the basis of only one bullish or bearish cycle but the health forecast of a product should be analyzed after at least two full cycles taking into the consideration the factors like the risk profiles, goals and the market situation of the present and the visible future and thus determining the amount of money to be invested in such and such assets or sectors. It is because mostly it is difficult to know which asset will do well in a given year, so the best solution to this problem is to invest in asset allocation funds which actually adjust the equity debt allocation as per the market conditions. Even if the investor fails to time the markets but still the investor must keep investing for the long term goals.    

The rising inventory and poor sales was getting a bit of concern in the real estate business and the developers are now getting a breather with a 25 basis (bps) cut in the repo rate by the reserve bank India (RBI) and expecting a further cut with CPI (consumer price index) inflation to stablise in the 5 to 5.5% range bound in 2015-16 with GDP (gross domestic product) which will result in gradual narrowing of the output gap. Taking into the consideration the revised GDP numbers which only indicate that the economy is growing at the much faster rate than expected is a clear indication that the slowdown in the real estate is just a temporary phase and this slowdown will end much sooner than expected. The revised GDP series is a good indicator that the economy has recovered much rapidly in the past few months and a sharp fall in the inflation and the improvement in the volume growth will revise the GDP growth forecast to close to 8%. All said and done the faster GDP growth and the declining interest rates will help the real estate sector in two ways one by reducing the unsold inventory and secondly help in generating the sales of new supplies further still, because the situation in the country’s top dozen real estate markets was a bit in dire state till now is headed upward now as the fall in the interest rates helps in motivating the people  to buy properties as the EMIs are affected and so also there are 100% home lone facility.