The Indian economy is not at risk of experiencing stagflation, a combination of slowing growth and higher inflation. The momentum of economic activity in the country is evidence against the possibility of stagflation. There are good results posted by many of the companies in Jama Wealth’s equity advisory portfolios, as well as increased construction activity, increased spending on vacations and air travel approaching pre-COVID levels, and increased government expenditure, particularly capital expenditure, as indicators of a strong economy.

Investing In India: Opportunities Amid Short-term Turbulence

We recommend that investors navigate the potential ups and downs of the stock market by having an appropriate asset allocation and a proven investment philosophy. In the event of an economic downturn, we recommend focusing on companies with low debt. We also believe that the technology sector, including IT, will continue to do well in the long run due to the essential role of technology in the post-COVID world. However, please note that operating costs may increase in the short term but are expected to stabilize over the medium term.

Navigating the Stock Market with Confidence

Regarding the monetary policy of the Reserve Bank of India (RBI), we expect policy rates to remain unchanged, as the RBI can increase rates later if necessary. He cites investing in India and also cites the attractiveness of India as an investment destination, lower valuations, and continued faith in equities as an asset class among Indian investors as reasons for the relatively small price correction in the market despite heavy selling by foreign institutional investors. However, we acknowledge that there may be turbulence in the market in the short term due to further falls in market indices and rising COVID cases. He shared tips for successful investing in India, including the importance of an appropriate asset allocation and a focus on companies with low debt.

To get more details about the markets please refer to Jama Wealth Blog