{"id":1890,"date":"2018-12-01T13:16:00","date_gmt":"2018-12-01T13:16:00","guid":{"rendered":""},"modified":"2025-04-03T17:21:05","modified_gmt":"2025-04-03T11:51:05","slug":"dont-wait-sidelines","status":"publish","type":"post","link":"https:\/\/www.equentis.com\/blog\/dont-wait-sidelines\/","title":{"rendered":"Don\u2019t Wait On Sidelines"},"content":{"rendered":"
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Many of the investors we talk to would like to invest more in equities \u2013 once the markets undergo some correction. While people have become more comfortable with the idea of buying common stocks<\/a> vs. investing in low yielding FDs \/ gold \/ real estate, yet the long rise of equity prices we have seen over the last year or two, leaves most people afraid – that they will suffer immediate losses if they invest before the markets correct. For many people, the obvious answer has been to wait for a correction.<\/p>\n\n\n\n

Q. However, does it make sense to wait for a significant correction before investing, or should we invest whenever we have the chance to do so?<\/strong><\/h3>\n\n\n\n
The outlook for fundamental growth in corporate earnings and the overall economy is a critical part of any strategy for investing in equities. Basis our detailed analysis of businesses across sectors, incorporating the quarter on quarter performance, management guidance, peer-set analysis as well as our sector level outlook – we are of the firm view that corporate earnings are likely to grow at a CaGR<\/a> of ~18-20% over the next 2-3 years which is significant from the listless growth witnessed in the recent past.<\/div>\n\n\n\n

The waning effects of glitches in GST and Demonetisation<\/h4>\n\n\n\n

With GST and demonetization behind us, and easy compares on earnings ahead, we believe the relative attractiveness of India will stand out in 2018. We expect the reform agenda pursued by the government to deliver sustainable growth in 2018 & beyond. Ground level green shoots are visible already. Sectors that were a drag on earnings at the index level are repairing themselves, such as PSUs<\/a>, Telecommunications, Materials and Real Estate. The government\u2019s wave of reforms will yield multiplier benefits.<\/p>\n\n\n\n

The transition from \u2018unorganized\u2019 to \u2018organized\u2019<\/h4>\n\n\n\n

With an Aadhaar driven economy where every bank account, mobile phone, demat account<\/a>, investment account and bill payment history is centralized, the government has effectively transformed the domestic economy in a matter of months from largely unorganized and unreported, to organized and reported. The benefits are, in our opinion, likely to be substantial, with lower costs of capital, greater transparency, increasing tax<\/a> collections, rising productivity & an improvement in operating efficiency.<\/p>\n\n\n\n

Q. Why 2018 will be a year the Indian economy will experience the pro-growth benefits from a wave of reforms which will prove to be the basic fuel for steady uptick in stock prices?<\/strong><\/h3>\n\n\n\n