How to get rich fast in India from equity? Spoiler Alert! Party over for Indian stock markets; shocking picture revealed
Millions of people are looking to earn wealth beyond their dreams. The quick answer for how to get rich fast in India is to invest in equities. This holds especially true for the young guns and to a lesser degree is true for other age brackets too. Even those who have retired should have a small investment in stock markets. However, the current scenario of Indian equities is, to put it mildly, heavily volatile. Just look at what is happening on the benchmark indices Sensex and Nifty 50! They had clocked an all-time high of 38,989.65 and over 11,500-mark just six months ago. Now, they have given away their glorious days and in fact are struggling to even retain near 36,000 pts and 10,800 pts levels. Well, there are certainly reasons for this. The year 2018 was filled with host of actions like Punjab National Bank (PNB) fraud, Budget 2018 (LTCG implementation), reclassification of mutual fund portfolios, US Fed rate hikes, US -China tariff war, rise in crude price, rupee hitting new low of 74.69, financial meltdown in Turkey, Brexit, IL&FS issue and even the state assembly elections, not to mention sundry other corporate and political events, including at the Centre, ICIC Bank, Yes Bank and even Axis Bank. They, together, beat down the markets together and individually.
So, if you are thinking, this trend is set to end and your invested fortunes are going to do a U-turn, here is a spoiler alert for you! This year, yes, 2019, is also not seen as being great for domestic equities! In Bank of America Merrill Lynch’s view, ‘the party is over for Indian stocks’!
Sanjay Mookim, BofA-ML’s India equity strategist in a Bloomberg Quint report said, "Imagine you are at a New Year party and happy to find out that there’s more room to dance but suddenly you realize that’s because everyone is leaving and the music has stopped."
Shocking? Yes, but in Mookim's view, that is the situation for Indian markets at the moment.
Mookim reportedly said, "The expansion of multiples that has happened is not because the market has discovered growth, it has happened because of the lower cost of capital everywhere and that seven or eight year trajectory has turned."
In fact, BofAML told the website, that it expects India's NSE Nifty 50 Index to end 2019 at 11,300 -- a 4 percent gain for the year -- it won’t be a smooth ride.
Shockingly, BofAML believes that key equity gauges may fall by a double-digit percentage in the first half of 2019. This would be triggered by political rhetoric preceding national elections expected around May, before stabilizing with the formation of a new government.
This simply means that your equities may have a bigger period of suffering still to go through.
For 2019, even Siddhartha Khemka Sr. Vice President- Head - Retail Research at Motilal Oswal said, "Brexit in March, Lok Sabha election in April-May, the ongoing US-China trade war, movement in crude oil price and US Dollar are some of the events which would keep Indian markets on the edge."
On Thursday, the Sensex finished at 36,106.50 down by 106.41 points or 0.29%, whereas the Nifty 50 completed at 10,821.60 below 33.55 points or 0.31%.