Equity strategy: Why you need to avoid certain sectors now
If you look at the country's economy,you will realise broadly speaking there are two things happening. One, the rupee is falling for around three months now and the second, the economy is slowing, notes Business Standard today. Even the Reserve Bank of India, reworked it GDP estimate number for FY14 to 5.5 percent, from 5.7 percent.
Clearly as retail investors, all such events do affect your portfolio. Take, for instance, many debt funds are already in the red zone. Sectors such as real estate and infrastructure are no better. Over all, the hurt is felt by almost every sector, However, there are some sectors that are hurt more than others.
So what should be your financial strategy in such a situation? TheBusiness Standard report say that panicking is not a solution. Instead, the smart thing to do is to slowly get rid of investments in sectors such as banking, capital goods, companies with huge import bills, oil & gas, fertilisers, chemicals, power and the like.
Let's not forget that central bank's latest liquidity-tightening measures will only nudge interest rates to move upwards. Resulting in an uncertain environment, especially in the bonds funds. This means if you invest in long-term bond funds, your NAV could get hit due to a rise in interest rates. In short, avoid lump sum investments, instead make disciplined staggered investments.
Read the entire Business Standard reporthere.