Gold!!??, Revealed ! How to increase wealth?

Dear Investors

I hope, all are cheered and celebrating twin benefits of recent market movements in Gold, Silver, Crude Oil and GSECs. One of the reader wrote –

“Gold is falling, congrats for beautiful analysis on gold.
Thanks that was very useful for me.”
-Venkat, Chennai

First, as expected and as you had been reading for quite some time now that Gold will fall to below $1300 and possibilities of settling around $1100 before final historic up move, has come true. I hope, you all took a chance to exit at higher price. I have written four times to you in past 2-3 months advising to stay away from Gold.

Second, GSEC funds are in lime light. Those invested in March till 1st week of April are having 1.5% returns on their investments. And, as I have been writing that after fall in Gold and Crude prices, call for rate cut will embolden and huge pressure will mount on RBI to change the stance from inflation to growth.

Declining price of vegetables pulled down inflation to over three-year low of 5.96 per cent in March, core inflation moderated to 3.5 per cent and food price inflation also eased to 8.2 per cent, which is likely to prompt the RBI to consider a rate cut in its annual monetary policy next month. Further pressure on RBI will emerge from lower corporate profit in Q4, continued lower IIP numbers and GDP continue to stay around 5% level or may be slipping further.

Therefore, I suggest if you have yet not invested in GSEC, do it now, you can write to me or contact me.

What is the big idea or reason behind, assertively, suggesting GSEC ( Government Securities(Bond)) investment?

This is stepping stone to create huge and long term wealth. If I simplify the definition of wealth than it is, to increase purchasing power of capital/money/asset you possess more than prevailing inflation or returns on other assets.

The first step to build wealth starts at this point in financial markets.

During deflation, prices of all commodities and assets come down. We are passing through a deflationary period. In next 6-8 months, you will see prices of almost everything coming down. How to take benefit of crashing prices? It is simple – Just remain in Cash. Say you had Rs. 30000 few months back, when Gold was trading at Rs. 30000/10gm. You could have bought only 10gm gold. Fast forward now, You have still that Rs. 30000 and Gold is trading at Rs. 26000/10gm. Instead of 10gm Gold, with same Rs. 30000, now you can buy 11.5 gm Gold. Your purchasing power increased by 15%.

This is the year to increase purchasing power of capital remaining in cash or cash equivalents.

But, what if you can increase purchasing power by more than 30%-40% or may be more than that.

This year, overall inflation will come down by 15-20% from high. For Example– Retail petrol price will drop below Rs. 65 and may reach near 62-63. Hence, sitting on just cash will increase your buying power by 15-20%. To increase it further, I have recommended GSEC funds, wherein with every 1% cut in interest rate, it returns 10% on investments. If RBI moves as expected and cut the rate of interest by 1.75% points, it will translate into the returns of roughly 17.5% on investment. Fall in inflation will help increase the purchasing power to the tune of 15-20% and return on other side of 17-20% in GSECs. Combination of duo offer 30-40% increase in buying power of capital.

Prices fall because of fall in demand. And that is the reason, we have observed that when inflation and interest rate come down, stock prices too come down with it. Relation is quite clear. Because of lower consumer demand, industrial production comes down and that reduces demand for all commodities. Interest rates are brought down because of fall in demand or to stimulate it. Hence, by the time interest rates are down, you also have stock market down at bottom, now with 30-40% increased buying power( combination of fall in inflation + GSEC returns ), enter into stock market, which could again easily be down by 15-20%. Cumulatively, you have increased buying power of capital by 50-60%. This is how smart investors create wealth and that is why, I have been suggesting this path to you.

How low Gold will go from here?

I know many investors are eager to buy Gold. Some want to buy it early because they missed earlier phase of rally and some think that it will not remain around these low levels and will soon reach back to Rs. 30000.

Please understand, Gold has remained up for 12 straight years, hence correction, too, will take its own time. DO not buy while it is still falling. Let it stabilise. Gold may stabilise around 25000 or may be around 20000. The most probable range looks 22000-25000. Hence, wait for Gold to fall further and let it stabilise. The kind of sell off seen in Gold is very surprising!! I had expected Gold to come down but fall of 10% in a day, Fall of 200 dollars in 2 days is quite astonishing and suggests that it will take time to stabilise. Do not buy in short rallies. Gold may go up to 26500 or 27000 in next week or so, but only to come down in following days.

Hence, wait for my signal to initiate buying .

I suggest readers to join my Plateau-Mountain-Cliff Wealth Enhancement Services. Where in you will get my recommendations on India Equity, Global Equity, Gold, Silver, Crude Oil, Currency and Debt Market, all in one package. Click to read — https://investmentacademy.wordpress.com/2012/12/26/plateau-mountain-cliff-wealth-enhancement-services/

Thanks

Regards

Dhaval Shah

Blog: https://investmentacademy.wordpress.com/ Cell: 98255 28815

Disclaimer: This is a free daily investment newsletter published by Investment Academy. This publication does not provide individual, customized investment or trading advice. All information is based upon data whose accuracy is deemed reliable, but not guaranteed. Performance returns cited are derived from our best estimates, but hypothetical as we do not track actual prices of customer purchases and sales. Author might have open positions in the stocks and Indices recommended above.

Dhaval Shah — Update: What If Gold crashes to $ 1100!!, Are you prepared?

Dear Investor

I wrote to you on 7th January asking Are you prepared for crash in Gold Price? and to give you an idea, I also mentioned $1100.

https://investmentacademy.wordpress.com/2013/01/07/what-if-gold-crashes-to-1100-are-you-prepared/

In my latest article posted on 5th April, I categorically said that Gold and Oil will continue to correct, easing inflation in India. I also gave specific target of $1400 and very high expectations of Gold dipping below $1300. For Oil, I placed target at $84. During this deflationary wave, we may see Oil correcting further to the lows of $ 76 and very high expectation to settle around $ 69.

https://investmentacademy.wordpress.com/2013/04/05/dhaval-shah-gsec-returns-in-excess-of-20-now/

The question, you may asking to yourself and advisors/experts would be, where to invest in 2013?

I still suggest if you have not invested in Government securities(Bonds), you are missing quite a good opportunity of earning min. 17.5% to max 27.5% returns in next 1-1.5 years with guaranteed capital. Contact me soon to invest.

Gold and Oil price correction is nothing less than blessings of God on India. Much of our domestic problems have roots in this two commodities( except dysfunctional government). Rupee was weak adding further inflationary pressures in last 2-3 years. Rupee was weak because of higher current account deficit and partly due to higher fiscal deficit. Higher fiscal deficit was taken care by Finance Minister in last budget. But, to contain current account deficit was beyond our control. Current account deficit is Export-Import. When we Import more than what we export, we have to sell our currency in world market to buy foreign currency to pay Companies/Firms/Sellers. As we depend heavily on Gulf nations for our Crude Oil needs, the higher the Crude Oil price goes, higher deficit it adds resulting weak currency. The unexpected factor, Gold, worsened the situation further, post 2008. Investor found solace in Gold, hurt by Government policies( bailout/monetary easing/sovereign debt/ cheapening currency). When Europe started bursting, it fuelled Gold buying further. India’s Gold import continued to increase. Gold import had become headache. Rest of the imports add value or are necessity as Crude Oil, Capital goods, food grains. But, Gold does not add value and only adds deficit.

Half of our deficit comes from Crude Oil imports and one third comes from Gold import.

Both commodities are correcting and I expect to correct them further to the target levels mentioned above.

Lower prices of these commodities will ease inflation and inflationary expectations in India. And, there was one reason, RBI was not aggressively slashing rates then that was higher inflation and higher inflationary expectations.

There is already pressure on RBI from industry and Finance ministry quarters to focus policy on Growth instead of Inflation, when GDP has come down to decade low levels, Industrial production is in negative territory, banking credit off take figures are easing and Car sales, too , are hitting lowest growth numbers of decade.

Therefore, I have no doubt and reiterate once again, this is once in a decade opportunity, wherein safely you can earn double digit returns with capital guarantee as you are buying GOI bonds.

I do not see any other opportunity parallel to this one in year 2013.

I suggest readers to join my Plateau-Mountain-Cliff Wealth Enhancement Services. Where in you will get my recommendations on India Equity, Global Equity, Gold, Silver, Crude Oil, Currency and Debt Market, all in one package. Click to read — https://investmentacademy.wordpress.com/2012/12/26/plateau-mountain-cliff-wealth-enhancement-services/

Thanks

Regards

Dhaval Shah

Blog: https://investmentacademy.wordpress.com/ Cell: 98255 28815

Disclaimer: This is a free daily investment newsletter published by Investment Academy. This publication does not provide individual, customized investment or trading advice. All information is based upon data whose accuracy is deemed reliable, but not guaranteed. Performance returns cited are derived from our best estimates, but hypothetical as we do not track actual prices of customer purchases and sales. Author might have open positions in the stocks and Indices recommended above.

From: Investment Academy [mailto:academyofinvestment]
Sent: 07 January 2013 14:07
Subject: What If Gold crashes to $ 1100!! Are you prepared??

Dear Investor

Read entire article before arriving on decision. Do not jump off to sell. Read rationales discussed here..

Have you subscribed to my Plateau-Mountain-Cliff Wealth Enhancement Services?

Last 4 days left. Join before 10th Jan, 2013 to avail whopping 50% discount.

Read in Detail: https://investmentacademy.wordpress.com/2012/12/26/plateau-mountain-cliff-wealth-enhancement-services/

I have tracked Gold very closely since 2007. I recommended Clients to buy Gold, when it was trading at $ 700 giving target of $ 2250. My Clients have earned superlative returns in Gold. I had recommended Gold, because there were rational behind it, certainly not because it has eternal value and to store it in safety vault.

https://investmentacademy.wordpress.com/2008/09/08/lets-learn-from-crude-to-gain-from-gold/

https://investmentacademy.wordpress.com/2008/09/05/over-sixty-economists-agree-gold-headed-above-2200/

I recommended Gold because

I could see that Globally Equity markets are trading at historical high values but far away from reality.

I could see Fundamentals were deteriorating globally notwithstanding markets were scaling newer highs.

World had reached to higher supply built up and demand push should cool down

And when economy crashes and markets tanks

World across Central Banks will pump in trillions of dollars to save the economy

I could see that quantitative easing will not solve problem but will exacerbate it as capital will not flow to intended assets

I could see easy money will drive commodities and metals to the roofs

Biggest of all

I wrote number of times that in time to come, Government will lose trust of the citizens & investors and precious metals will become insurance against Government default

I wrote that excessive printing will lead to higher inflationary environment and higher inflationary expectations and that leads to higher Gold prices ( precious metals)

I wrote that never ever historically, we have seen such a massive printing across the globe.. may it be developed or emerging, east or west, all joined the race of printing to ensure that their economy is least affected in this crisis.

I also presented statistics of money printing vs Gold price.

Every 1 % more currency printing( quantitative easing) in US gives 1 % rise to the Gold’s price

Every 1 % more currency printing( quantitative easing) in Europe gives 0.9 % rise to the Gold’s price

Every 1 % more currency printing( quantitative easing) in India gives 0.7 % rise to the Gold’s price

Gold is still considered as best inflation hedge, insurance against Govt’s default, true money, key currency to hold during war time.

Gold always retains its purchasing power while currency always lose purchasing power

But, nothing goes up forever how true or good it may be….

I believe Gold will hit the wall in 2013.

2012 was the 12th straight up year for Gold. Gold has not seen such a persistent stupendous rise in past century. We have historical evidences which supports rally for straight 10 years or less.

During last rally between 1970-1980, Gold paused after April 1974 to Aug 1976. For more than 2 years and corrected 46 % from $ 189 to $ 104 before final leg up.

Also understand that Gold is trendsetter. We can get the sense of inflation and deflation from Gold’s trend.

Recent development across the world shows restraint in continuing monetary and fiscal easing.

In US, either through higher taxes or through expenditure cuts, Govt will ensure that People are left with less money to spend. US Govt is under tremendous pressure from rating agencies to keep his house in order to retain AAA rating. In short, US will have to ensure that it spends less and save more or/and it spends same but earns more through higher taxes.

Central bank of US released minutes of Dec meeting and many participants argued about the long term effects of continued monetary easing. Somewhere in mindset of policy makers, the fear of long term effects of Quantitative Easing and failure of monetary easing done so far has compelled them to relook at the policy.

Entire Europe is in some or other way exercising austerities. China is trying to cool the growth. Indian Finance Minister also declared to be ready for bitter medicine in 2013. After having expanded balance sheet of Govt and Central bank for last 4 years, time has come to either pause for a while or cut it back to remain healthy and to take care of long term consequences.

As I explained earlier that higher money printing raises Gold prices. Similarly, reduced money printing will reduce Gold prices to similar extend.

Hence, I advise to remain on sidelines until we are clear of policy mess.

Last 3 weeks of closings of Gold has come near $ 1655. Gold’s direction further from this level will be decisive trend setter for Gold and rest of the markets.

As you can observe in attached chart. Gold is forming rectangle along with declining triangle.

I advise to remain sideways until Gold breaks out on either side.

I advise you to Join Plateau-Mountain-Cliff Wealth Enhancement Services to get precise moves of Gold, Indian Equity market, Foreign Equity markets, Currencies, debts and broad economic trends of the world.

Read in Detail: https://investmentacademy.wordpress.com/2012/12/26/plateau-mountain-cliff-wealth-enhancement-services/

Thanks

Regards

Dhaval Shah

Blog: https://investmentacademy.wordpress.com/ Cell: 98255 28815

Dhaval Shah– CRISIL confirms Rs. 25000 crore inflow in Long Term Debt & Gilt funds.

Dear Investor

Recent report of CRISIL confirms that I have been guiding you in right direction. Smart money and HNI money have been flowing in long term debt and Gilt funds, anticipating further rate cuts by RBI. Rs. 25000 crore have been invested into Long Term Debt and Gilt funds in last quarter(Jan-March, 2013). Average debt assets rose by 35 % in Jan-March, 2013 quarter. Gilt funds assets rose by 63%.

1% cut in interest rate gives 10% returns on long term Government securities(Bond). I expect rate cut of min. 1.75% to max 2.75% in next 1-1.5 years. RBI’s such move offer returns on investment from 17.5% to 27.5% in next 1-1.5 years with absolute safety of capital.

My clients have earned absolute 30% returns on investment in 2008, when RBI slashed interest rates 2.75% in short span of 6 months.

Crisil Report – Economic Times

The Mutual Fund AUM (average assets under management) rose to 8.16 lakh crore as the end of Mar ’13 following huge inflows into the long-term debt and gilt funds. According to a report by Crisil, Long-term debt and gilt funds posted a sharp rise in their assets in Mar ’13 quarter due to inflows led by expectations that RBI would initiate monetary easing.

However, equity mutual funds average AUM fell by about 1 per cent to Rs 2.09 trillion led by outflows and mark to market losses, says the Crisil Report

http://articles.economictimes.indiatimes.com/2013-04-05/news/38306997_1_gold-etfs-inflows-average-aum

HNIs pump Rs 25k cr in debt in Q4; investors bet big on further rate cut – Economic Times

Corporates and high net worth investors have raised bullish bets on debt market securities anticipating further interest rate cuts by Reserve Bank of India or RBI. These investors have pumped Rs25,000 crore into long-term debt and gilt funds, primarily government bonds, during the March quarter, taking their outstanding investment tally to Rs93,300 crore.

"Assets of long-term debt funds rose by 35% to Rs85,500 crore, while those of gilt funds gained by 63% to Rs 7,800 crore, during the quarter ended March 2013, compare sequential December quarter. On a year-on-year basis, the assets of these categories have risen by 345% and 119%, respectively" said Jiju Vidyadharan, director, funds and fixed income research, Crisil Research. "Investor interest in the longterm debt category has risen lately, as debt market rallies when the RBI cuts key interest rates" Vidyadharan added. Bond prices and yields move in opposite directions. "There is lot of investor interest in debt funds among investors," said Dhruva Chatterji, senior research analyst, global funds tracker Morningstar.

http://articles.economictimes.indiatimes.com/2013-04-06/news/38327373_1_debt-market-long-term-debt-funds-lakh-crore

If you have not read my earlier articles on this topic, click on link.

https://investmentacademy.wordpress.com/2013/04/05/dhaval-shah-gsec-returns-in-excess-of-20-now/

https://investmentacademy.wordpress.com/2013/03/14/dhaval-shah-smart-money-has-moved-in-when-will-you/

https://investmentacademy.wordpress.com/2013/03/12/dhaval-shah-min-17-5-with-guaranteed-safety/

https://investmentacademy.wordpress.com/2013/02/09/2013-storm-all-around/

Invest under guidance of expert, because in any investment entry and exit are of vital importance.

Thanks

Regards

Dhaval Shah

Blog: https://investmentacademy.wordpress.com/ Cell: 98255 28815

Disclaimer: This is a free daily investment newsletter published by Investment Academy. This publication does not provide individual, customized investment or trading advice. All information is based upon data whose accuracy is deemed reliable, but not guaranteed. Performance returns cited are derived from our best estimates, but hypothetical as we do not track actual prices of customer purchases and sales. Author might have open positions in the stocks and Indices recommended above.

Dhaval Shah- GSEC : Returns in excess of 20 % now !!!??

Dear Investor

If you have not invested in Government Securities funds, yet. Fortunately, you have not lost an opportunity because though RBI cut the repo rate by 0.25%, due to March ending liquidity situation, which usually remains quite strained in debt market and due to that intended gain was not realised.

But, do not delay now. 10 yr bond yield had hardened to 8 % from 7.85 % from middle of march. It has started softening from 1st April and now quoting at 7.95 %.

With more weak data pouring in from domestic and international markets, expectation of returns are climbing high. I am tempted to say, we can safely target 20 % returns( mostly guaranteed ) in Government securities fund in next 1-1.5 years.

One percent cut in interest rate translates into 10% returns in Government Securities(Bonds).

I hope, you heeded my advice to reduce equity exposure of your portfolio. That should have saved you, 15-50% loss on your investments.

In Detail

RBI reduced Repo rate by 25 basis points. There was an expectation of 50 basis points cut. I said to clients, if RBI reduces 25 basis points that indicates RBI will cut rates moderately and if reduces by 50 basis points that will indicate aggressive stand of RBI. But, I am very sure of RBI favouring rate cuts against inflation concerns in time to come. I will explain in detail, later.

But, RBI not only reduced just 25 basis points but also asserted that there is limited room for further rate cut, if inflation persists at present level.

Important question is , would RBI continue to concentrate on inflation at the cost of growth? And if yes, when stance will change? At 4% GDP? At 2% GDP?

I have lauded RBI’s performance and decisions because in last 15 years, RBI has taken decisions independently, not getting influenced by Government and politicians.

But, few times, RBI has delayed key – turning decisions and thus has fallen behind the curve. I argued same, when RBI delayed rate hikes in 2010.

I wrote on 17th May, 2010, that RBI is behind the curve. By the time, RBI started to raise rates aggressively, inflation had reached to 10% from negative territory. The price we paid for delayed decision is, RBI had to raise rates to 8.50 % to contain inflation , wherein RBI could contain inflation with 7% repo rate during true bull run of 2007.

image003

image004

I strongly believe that RBI is falling behind the curve in reducing rates. Is to contain inflation alone,, the responsibility of RBI? To contain inflation, which was propelled by high food, energy and real estate prices, RBI killed rest of the economy. Interest rates remained above 7% for more than 2.5 years.

Industrial production got hit hard by RBI policy. Yes, Government policies and governance deficit are equally responsible factors for the same. But, cost of money decides everything. Industrial Production Index hit the -5 towards end of 2011 and since then has fluctuated between -4 to +5. In pre crisis period, it remained above +5 and mostly near 10 and mostly above 10 in 2007.

If for any reason, Oil prices, food prices and Real Estate prices remain at the present level, Will RBI prefer to kill the rest of the economy, to cure 2-3 sectors of the economy? Oil prices are beyond our control(decided by OPEC and market forces), if Coal India does not mine enough and power sector imports coal at double the price and pass it on to consumer, it is beyond RBI’s control, Food price inflation has structural issues( cold storage, transportation, access to market) and for Real Estate, I do not know whom to blame Black money, Politicians, Land mafias, lack of transparency, archaic laws, absence of regulator?

Can these problems be solved by Keeping interest rates elevated? Who does not know in India that we have parallel Black Economy. Food prices are high because FCI and Agriculture minister want to control the market, FCI does not have proper storage facilities, tens of thousands of tonnes of food grains get rotten in godowns of FCI, food subsidy is the best way for politicians to steal huge amount of government money( Only Uttar Pradesh has scandal of 2 lac crore, yes you read it write, food subsidy, Read: http://hungryindia.hpage.co.in/up_food_scam_14876315.html , figure of 2 lakh crore was reported by CBI).

Does RBI has capacity or has it been empowered to contain such things? I think, then it is just illusion of RBI that its interest rates control the food and energy prices. As it got proved, food prices remain elevated during last 2-3 years in spite of RBI keeping interest rate above 7 %.

Good news is – when RBI delayed rate hike in 2010, RBI had to hike full 150 basis points(1.5 %) more to contain inflation. Now, RBI is delaying cut in interest rates, in result RBI will have to slash it more than expected earlier, giving birth to new bubble.

Let me also say that if RBI would have managed rupee well, we would have not landed in economic uncertainty, we are passing through now. RBI explicitly said time and again that RBI will not intervene and will let market forces decide the price of rupee. Managing rupee around 50, RBI would have ensured 10-12 % cut in inflation, as we depend heavily on Oil imports. I have observed many Central Banks of the world, just talk down or talk up the market sentiment in their favour and thus buy the time for the action or correction.

Let us look at present situation of our economy

Source: Economic Times

Car sales fall 20% in March despite record discounts

After a free fall in February, car sales in India for the month of March hit another record low, leading to the overall car sales moving into a negative territory for the entire fiscal, the first in a decade.

Top 50 large-cap companies may report worst aggregate top line growth in two years

Source: Economic Times

India’s 50 most frequently traded large-cap companies are likely to report the worst aggregate top line growth in two years in the quarter to March on lower spending by consumers, although operating margins have improved.
According to the ET Intelligence Group’s forecast of these companies, which constitute the popular Nifty 50 Index, aggregate sales are expected to grow by 4% from a year ago while net profit will rise by 5%. Sales are likely to grow at the slowest pace in nine quarters. In the previous quarter, at 9.4%, revenue growth fell below 10% for the first time in two years.

Finance Minister said Government to press for lower RBI rates

Finance Minister P Chidambaram expressed that the government will continue to argue for lowering the interest rates of Reserve Bank in the backdrop of softening headline inflation and the need to promote economic growth.

“The RBI has to weigh the fact that headline inflation has come down even though consumer price inflation is sticky…It has to keep current account deficit in mind before it lowers interest rate, he said.

He further added that government is always pro-growth and the government will always argue for lower interest rates.

RBI is scheduled to announce the monetary policy for the current financial year on May 3 during which it will take a call on interest rates keeping in view the inflation and other macro-economic parameters like growth rate, industrial production etc.

Some Good news

All factors mentioned above will weigh heavily on RBI’s policy next week. Yesterday, heads of Banks met with RBI governor and proposed to reduce CRR along with Repo rate in next policy meet on 3rd May.

Inflation will continue to ease further

Dollar has continued to appreciate putting additional pressure on Gold and Oil correction. As I have already written that Gold will continue to correct to below $ 1400 level and possibly to $ 1300 level, this correction will help to ease Gold import demand and in turn current account deficit and rupee. Gold import has 1/3 share of total imports.

Oil is also showing signs of not sustaining at present above $ 98 level(Light Sweet Crude Oil). With continued rise in Dollar Index, Oil is well prepared to fall to $ 84 level. Oil is half of our total imports.

Correction in these two commodities will ease pressure on current account and rupee, resulting in lower inflation. This will pave way for RBI to reduce rates.

In my article dated 9th Feb, 2013, I had depicted GDP picture of major economies of the world. Click to read – https://investmentacademy.wordpress.com/2013/02/09/2013-storm-all-around/

I am reproducing GDP contents from that article

World Economies Experiencing Mild Recovery

From the trough of 2008-09, major world economies recovered till middle of 2012. US GDP growth rate declined from peak of 2.5% to -4.6% towards middle of 2009 and got back to 2.6% in 3rd quarter of 2012. But, last quarter GDP has slipped to 1.5% raising fresh concerns. IF it falls in 1st quarter of 2013 below 1.5%, it can slip well below X-axis to negative zone.

Germany grew at above 3.5% in 2007, declined to -6.8% during crisis period and bounced back to 4.7% in 2011. But, from there it has continued to slip and last quarter GDP growth came at just 0.4% lowest since 2007. It, too, can slip below X-axis. Growth rate for France came at 0.15% and -0.5% for United Kingdom. In nut shell, Europe has started degrowing and hence the much hyped economic recovery stories are befooling investors.

Emerging nations economies did recover well in 2011-12 but are facing strong headwinds from lower demand from west, higher inflation at home and very high currency volatility.

China’s double digit GDP growth rate in 2007-08 had slipped then in single digit and except 3 quarters in 2010, it has remained in single digit. Recent data showed a mild uptick. China’s GDP grew at 7.9% vs 7.4% of previous quarter. Yes, silver lining… India has slipped to 5.3% from high of 9.4%.

Indonesia and Philippines are true exception, their growth rates scaled up to pre crisis levels in 2010 and since then remained there.

It should be noted that among major Asian emerging nation, INDIA has fallen quite more compared to peers. It glorifies the Governance deficit of last 5 years.

A day before, IMF said that India’s de growth is attributed to domestic factors. Foreign factors has less to affect growth to the extent it got reflected in recent statements by Govt.

Japan slipped to 0.5% from 3.9% growth rate in 2012. South Korea fell from as high as 8.7% registered in 2010 to just 1.5% in last quarter.

I believe, you have understood the broad picture. The main stream media is not highlighting that except some Asian nations, whole world is slipping into red again as they did collectively in 2008. If you put together Europe, UK, US, Japan, South Korea and India, they will account for atleast more than 60-70% of world GDP and these nations GDP growth is on continuous decline.

It poses a grave picture for 2013. I again reiterate do not remain heavily invested in stocks.

Equity Market:

Equity market continue to trade sideways to negative factoring in uncertainty and lower growth for next few quarters.

I strongly suggest not to miss the opportunity of investing in secured, once a decade opportunity of earning 17.5 % to in excess of 20 % returns in next 1-1.5 years from Government Bonds.

Thanks

Regards

Dhaval Shah

Blog: https://investmentacademy.wordpress.com/ Cell: 98255 28815

Disclaimer: This is a free investment newsletter published by Investment Academy. This publication does not provide individual, customized investment or trading advice. All information is based upon data whose accuracy is deemed reliable, but not guaranteed. Performance returns cited are derived from our best estimates, but hypothetical as we do not track actual prices of customer purchases and sales. Author might have open positions in the stocks and Indices recommended above.