Future looks Bright

We at VRIDHI would like to Wish You all a Very Happy Deepawali. May you make lots of money by next Diwali. You can call us anytime in case you require our assistance.

181106 – In the previous edition of MarketFastFood, it was mentioned that contact your financial adviser as the market looks like bottoming out somewhere in this region. The index level then was 34733, went little more down and is trading today at 35115 as I write this post of MFF. So the market is in a Buy zone or not? We at VRIDHI have started looking seriously at fresh buys but very selectively. We believe that the buying opportunities will be with very selective Stocks and Mutual Funds. You cannot simply go and buy an index or index fund for sure. Hence, taking help of a full-time financial adviser becomes a must.

There are always reasons for the markets to correct or move up. Many people link the movement of the market with the state of the country’s economy. This comparison is absolutely wrong. As Warren Buffet says, Markets in short-term are voting machines and in long-term are weighing machines. The economy may be doing well today but markets can correct steeply due to overvaluations. The economy may be doing bad but markets may do good in the short term. But if you see an average of 5 years, the market would have reflected correctly what the economy did too.

What I am trying to say here is that don’t get carried away with the movement of last few months. Think where will Indian economy be 5 years hence, and what are the signals today? If you are an optimist continue reading, but if you are from the camp that believes nothing is right, even though your own salary being quite fat, then no one can help you. In the market, you need to be grounded, see the real things and don’t have any bias while thinking, and yes always use some bit of common sense too since few missing links can be discovered only with common sense. Market kills a non-optimist!

The GST collections have crossed the 1 Lakh Crore mark last month. It’s a psychological figure for the country but a number of great comforts for analysts like me and the government. The government has been dealing with lower collections since GST was implemented and that was putting pressure of fiscal numbers and in turn on the currency. As the number goes up, these pressures will subside.

Even the corporate India was suffering due to initial confusion and change. The human mind is conditioned to a particular way of working and when you are forced to change there is a lot of resistance. Exactly this thing happened in case of GST too. All these initial hiccups are behind us now, as time progresses people will start appreciating this tax reform except those who are perennially pessimists.

Next look at the PMI numbers. Shows that the economy and its participants are very positive.

The inflation remains under control. Petrol alone is costly which most food products are lower from there 2013 levels. In certain countries, the petrol prices are dirt cheap but the food prices are unaffordable. Few Lakh percentage in inflation! Want to swap the situation? No way!

India continues to rise in the World Bank’s Ease of Doing Business. Looks like we are not far away from the Top 50 club. Just a matter of time. The whole world will notice our country when we are there. A lot of investment and FDI potential will open up further. Just close your eyes and think what can happen if all these come true and looks like the situation will surely come true.

In case you still have confusion, feel free to call us by clicking Contact Us. We have a presence in Chennai, Delhi, Goa and Kanyakumari (Nagercoil). You can reach me very easily for a personal talk.

Not taking much time so that you can continue enjoying Diwali celebrations, keep aside some money every month for the next 9 months and deploy it with discipline. Just be selective on what you are buying. Indian markets are poised to do very well in the next few years and will also be very volatile in the next few months. A roller coaster ride is expected. We will be in a much better situation by next Diwali.

Feel free to call us any time.

Once Again a Very Happy Diwali to you and your Family.

Thanks and Happy Investing

Vivek Karwa


Time to start looking for fresh investments

181012 – In the last article I had mentioned that we have started moving funds into equities in a staggered manner since valuations have started looking fair. Markets post that day have not moved much. We saw a big down day after Dow and Nasdaq fell post the comments of US president. Though the day was down, Indian markets fell much less compared to all other markets.

US markets fell steeply even on Thursday, but Indian markets bucked the trend particularly since crude prices were down. In fact, I on my Facebook profile had mentioned in the morning that things look positive. The day went as expected. You can click the link and join me on FB.

Sensex hit a high of 38990 on 29/8/18 and has closed at 34733 on 12/10/18 a drop of almost 11% while on BSE 500 index hit a high of 15938 on 3/9/18 and closed at 13906 on 12/10/18, a drop of 12.75%

In short, I should say that the correction has been healthy and reiterate that one should start looking at equity investments a bit more seriously now. Though the Sensex and BSE 500 have corrected between 10% and 13% approx., the micro-caps and small caps have been battered out of shape. Many of them may never recover and this cleansing process happens during every deep correction. Even this correction will clean many such companies. PC Jewellers, Gitanjali, Manpasand, Noida Toll, are few examples, the promoters will have to take great efforts to lift them up again.

So what makes me say start investing here on? Please keep in mind that when I say start, it does not mean jump in Monday morning. Markets will still be volatile and hence do the entry and the exit with help of your financial adviser. This page is giving you a broad guidance and not any specific idea on a stock.

Again, So what makes me say start investing here on?

Firstly, FII’s have been sellers in Indian markets till now in India. When do FII’s sell? Generally, they have either sold when they have been themselves facing problems or when they had confidence in valuations in their own country.

Whatever may be the reasons, one thing is historically clear! Whenever investment was made during FII’s dumping, the next two years good money was made. Around 49% of BSE200’s stake is held by the promoters, around 24% is held by the FII’s, around 6.5% is held by Mutual Funds and around 6.5% is held by Banks and Insurance companies. Around 27000 Crs of selling has been done by FII’s till date, which is just single-digit percentage points of their holdings in BSE200.

Five years back had this sort of selling taken place, markets would have tanked much more. This time the interest in markets is much higher and in spite of some SIP’s in Mutual Funds getting cancelled, almost around 6500 Crs of money is flowing into the system month after month and that is cushioning the markets.

Secondly, nothing is wrong with the fundamentals of the Indian economy as made out by certain sections of the society. We have recently entered the Top 5 Economies of the world feat.

What does an economy require to grow? Roads, Rail, Flight and Mobile connectivity, Ports, Waterways? India has been spending tons of money on all these in the last few years! We are set to and bound to grow!

Thirdly, the earnings of Indian companies have finally started growing. We have been waiting for almost 3 years for the corporate earnings to pick up and finally, they have.

What can be the biggest risk to Indian markets?

Crude oil remains the most critical issue. India imports almost 44 Lac barrels of oil per day! That’s huge. Every dollar increase in crude prices burdens us with Rs.44 Lacs x 74 per day! That’s huge! Convert the amount to monthly and yearly, you will be shocked. Crude prices have increased by almost 30 dollars in recent past.

I am not still worried about the crude prices. The world is moving fast towards electric and the prices will remain under pressure. The Indian government is also serious about reducing the use of oil dependence. Even today PM Modi has chaired a meeting regarding this.

Hence, we are somewhere near the bottom on the index. Many stocks may have already made the bottoms. Call your Financial Adviser and start your investments.


Vivek Karwa

Have a strong heart in markets

In fact, writing this article after a long gap since we have resorted to Facebook Live videos and YouTube Live videos which most find it easier to listen to. But seeing the recent volatility in the market some investors have been asking for the views which can be read through and hence posting this issue of MarketFastFood and will continue doing it almost every week henceforth. So, stay connect with the VRIDHI website by subscribing for the email alerts and click the link to find all our social media outreach pages: https://vridhi.co.in/2015/05/23/vridhi-connect/

When it comes to stock market, they will always be volatile, ups and downs are part and parcel of markets and an investor must be mentally prepared to ride all the ups and downs in his investing life. That’s why you should not be coming to markets with less that 3-5 years. Yes, expecting to benefit from the volatility can always be expected by applying timing skills to some extent. But that does not mean you will always be successful and hence be prepared to ride the waves at times.

We at VRIDHI during past few months have been suggesting our clients invest in safer avenues and last Friday have started moving those monies to Equity and Equity Mutual Funds in a staggered manner so as to ride the wave upwards as and when it comes. Is this the bottom? Will try to ponder over that below, but yes, we at present have higher levels of safety than what was there few months back.

So what brought the market down this time apart from the high valuations? The market needs a reason to correct and this time the reasons are flowing freely nonstop that has battered market out of shape with many stocks hitting the 2008-2009 lows. Bad situation! Same was the case in 2008-2009 but then those who dared to invest and stay invested made a lot of money later. Hence though bad situation, a smart investor would use this opportunity instead of fearing and running away. Time to look at Stock Investments Seriously!

India was enjoying the Crude Oil price situation, the government was very judicious in using the extra cash which came by way of taxes for paying back the Loans and controlling the fiscal situation. Our bad luck that crude went up and Rupee also depreciated which was negative for the markets.

Then comes the news of IL&FS downgrade and default. Today, let’s focus on this topic alone. IL&FS got downgraded from the A category to below investment grade in one straight shot! Serious issue! A question can be raised even on the rating agencies on why they were sleeping till now. A company which has been enjoying A grade rating for 31 years got downgraded so suddenly catching all investors unaware.

IL&FS defaulting on their payments is not a small issue. With Rs.91000/- Crs of debt, if the company goes bankrupt, it can be India’s Leman Brothers event.

The good part is that the assets of the company are not bad. Most of them can be monetised and that’s why all major shareholders are ready to increase the stake in the company including the foreign shareholder. A Japanese company also has shown interest, and Aditya Birla group and other corporates have expressed interest in buying out the businesses selectively.

Hence, it is a matter of time that the money which was defaulted will be recovered back. Moreover being election year the Government and RBI will not allow such an old institution to go the Leman Brothers way. There are assets available, the issue which has cropped up is Liquidity. You may own 10 Bungalows, but when someone comes to know that you require money urgently, people will offer less than the market rates! Hence once the large shareholders pump in money and the liquidity problem dries up, sanity would return.

Hence, don’t panic, valuations this time are cheap in select Mid and Small Cap companies. The timing can make you good money, don’t fall prey to people who say buy and forget. Even IL&FS required tracking!

You can call us at VRIDHI anytime! https://vridhi.co.in/contact-us/


Vivek Karwa

For Investors Budget is a Non Event

Most investors (consider it’s you and we are writing this for you) suffer on one thing… You all plan for their life goals which are anywhere between 5 to 35 years away but start focusing on events which may or may not affect their investments in short term.

We at VRIDHI regularly plan for Long Term Life Goals of people, and then ask You to focus on investing in a disciplined manner. You invest for some months and as the fund values start increasing start worrying about silly things like budget and then start calling us. We are not blaming You for this behaviour, after all You are a human being and supposed to be behaving like this..! As Advisors it is our responsibility to unconfuse You, handhold You, solace You, and help you ride the ups and downs without any fear.

When you have an advisor you need not worry what’s going to happen in next few days or months, your advisor will take enough actions to ride the waves appropriately. You just focus on the goals and stop looking at the returns frequently. Not all years are going to be good or bad. Everything averages out in long term and if the advisor is able to create even a 2% – 3% extra over the average, be rest assured you have a great future. Please don’t underestimate this 2% – 3% it can’t be easily created if you try it yourself.

So what made me call Budget2018 as a Silly Thing?

It’s surely not a sweeping statement. Read the article which we posted on New Year Day. (Click Here to read it). We wrote a line… ‘knowing the politics of Mr. Modi, the freebie politics is not present in the blood of Modi like others’

Whole of January we have been hearing people say that the budget may be populist. In a recent interview to a TV channel PM himself made it clear that: it’s a myth that people want freebies and he will only do what is good for the country. So what we posted seems to be on right track and on Feb.1 it may also be proved 100% right.

Hence don’t expect stupid and uneconomic decisions like waiving off 70000+ Crs just to win votes. Yes announcing schemes to benefit Rural and Agri sectors which can lift them up can’t be termed as populist. We expect many schemes, to be announced being the last budget, if you can understand the scheme of things and invest properly, that extra return over and above average will not be a day dream. In the New Year article we said: 2018 will differentiate Men from Boys and will not be an easy year.

Earlier we were feeling that the general elections may be advanced to Dec’18 with elections in Rajasthan – MP – Chattisgarh. Now we are getting convinced that they may happen as scheduled.

Be assured that the 2019 Lok Sabha polls will be the Greatest Event on Planet Earth till date, much bigger than Trump winning US elections. 2019 election is going to be by far biggest thing we will see in our life time. The politicians will go to any extent for defeating Modi. Many would stoop to any level to win. With violence erupting in Rajasthan, MP and Chattisgarh, over the movie Padmavati, all these are poll bound states, anyone with common sense can understand that the stage is already being set for 2019 election and the state elections in 2018.

So obviously there would be volatility. Days of Blindly Investing have gone. In 2018 you will need strategies, timely actions and have to target your investments well. If your advisor tells you to remain invested and blindly continue doing SIP in one fund or stock and ride the whole cycle then you don’t require him.

So, stay focused and continue investing. 2018 can be tough only for those who are not aware themselves on why they are investing.

We will continue posting timely articles which can help you to stay course of wealth creation. Follow this website by entering your email id. It can be easily done by logging on to www.VRIDHI.co.in on a desktop.

So continue investing happily and don’t hesitate to ping us or refer us to your loved ones.


Vivek Karwa

Must Read for Techies and Doctors: https://vridhi.co.in/2016/03/26/must-read/

Year 2018 is going to be differentiator between the Men and the Boys

What a year 2017 has been. The Sensex has risen from 26595 to 34057 in one year. That’s 21.91% in a year, meanwhile the BSE Midcap delivered 47% while the BSE Small Cap Index took away the winners prize with a whopping 58%

This is an eye opener for those who stay away from Equities thinking that they are risky. They are risky only if you invest with expectations of high returns in short term, if people treat Equities like Long Term Fixed Deposits then they become more and more safer with the passing time. This does not mean you go and do the act of investing yourself. The line ‘they become more and more safer with the passing time’ holds good only when you are seeking the advice from an experienced advisor. Keep in mind there are many examples where people have lost even in 2017, though 2017 can be termed as best of the years.

So how does 2018 hold for investors? We at VRIDHI believe 2018 is going to be a challenging, volatile and a year with full of surprises, and yet there would be ample number of opportunities which would frequently be thrown up, will the investors grab them at the right point is a big question. Hence again you may need help of an experienced advisor. In 2017 the percentage of regrets may have been very less but 2018 would clearly differentiate between the Men and the Boys. Only seasoned people will be able to grab most of the opportunities.

We may end Sensex in 2018 at around 38750 – 40000. We may see great amount of support at 29450 on the lower side and immediate support at 32550. When we say target of around 38750 – 40000 for the year, in percentage terms it is just around 12% to 17% meaning we need to be really opportunistic in the ensuing year. Those not feeling happy with these returns kindly keep in mind Equities will still be the best performing asset class in this year and hence stay invested in a tactical manner!

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So what can drive the market up or down in the next year? Some of the factors are mentioned below:

* Earnings pickup: Since many quarters, we all are expecting that the corporate earnings would pick up soon. After the implementation of GST and the systems having almost settled fully, we expect that the earnings can pick up from March quarter onwards. If the earnings pick up happens in a secular manner we may cross even the 40k mark which we have mentioned above.

* Budget and Govt Spending: Feb.1 would be the last full budget of this government and hence expect many favourable announcements for the people and the economy. Only thing which we should be alert of is that the govt should not go overboard and create fiscal deficit. But knowing the politics of Mr. Modi, the freebie politics is not present in the blood of Modi like others. Widening of Fiscal Deficit can create problems like those we saw during 2013 under MMS. This govt has been under control till now.

* State Elections and General Elections: People in general don’t think with mind open. They would see a great defeat in Modi if the ruling party does not fare well in a state like TN where they actually have no presence! They conveniently forget the 19 state governments and central govt is ruled by same people. Mentioning all these since every state election is crucial in 2018. There are 8 state elections and we expect even the general elections to be advanced to Dec’18. We saw 800 points intraday dip when at a point of time Congress went ahead in Gujarat! Hence market is not going to like any bad surprises and market expects that the same PM be re-elected. Any change would be a temporary but sharp setback to our money!

* Global Markets and Geo-Political Tensions: Globally markets are flushed with liquidity. As long as this liquidity is not squeezed out, we would continue doing well. The risk of North Korea, Pakistan and the likes going out of senses is a huge problem. India is also seeing huge money flowing into markets from the traditional FD investors.

* Inflation and Interest Rates: There are fears that RBI may hike Interest Rates in case Inflation spikes up. We are totally control over inflation till now and are around the RBI expectations. Inflation spikes can bring in selling pressure in the markets and a rate hike can make the situation worse.

We don’t think Interest Rates can move up from here, on the contrarian we feel they are still headed only downwards. Those meeting their ends meet with the interest amounts are finding it quite difficult. Senior Citizens in particular are feeling the pinch. Sadly this is a global phenomenon and we got to deal with it.

With 2017 getting over, let’s change our thinking. Let 2018 begin looking for new opportunities. At VRIDHI we can help you get better than Fixed Deposits with minimum risks. We take Extra Care of Retired and Seniors Citizens. VRIDHI has representations in Delhi, Chennai, Goa and Nagercoil.

Many of you would be looking for some safe bets in 2018, have tried to mention few of them on this show at Moneycontrol. You can view the show by Clicking Here.

So plan your money well in 2018 and tag your investments with your goals in life. Don’t blindly invest in anything, including Bitcoins! Seek help of your Investment Adviser.

Happy Investing

Vivek Karwa



Think Investments Think India

We at VRIDHI wish you all a Very Happy Deepavali, may the Samvat 2074 bring in more prosperity and India emerges stronger.

In the previous MarketFastFood article we had mentioned that Investors think markets can only go up, meaning they are currently thinking that markets cannot come down. You can read the article by clicking here. Fact of the matter is, within few days of posting that article, the markets did correct by almost 4-5% and further as mentioned in the article again, market also recovered very fast and we all know where it is today. We are hovering at around 32600 today.

Performance wise, last Diwali to this Diwali has been splendid. Diwali last year was on 30-10-2016 and the Sensex was at 27900 approx. and today it is at 32584.

Very soon after Diwali last year, the government announced Remonetisation of Rs.500/- and Rs.1000/- notes on 8-Nov.

The political scenario post Nov-8 has been too hot with opposition trying to criticise the move. Fact is, they themselves do not know if it’s needed for the country or not. Any person with little common sense would know that when around 85% of the currency in circulation was of high value, and further 85% of that high value never entered any bank account is enough proof that most was in black.

Ask this to any Economist, Fund Manager or an Analyst and they would confirm this. Don’t think why our former PM opposed it, he needs to remain in good books of his leaders, period. Black money in system leads to high inflation in real assets and that’s why Real Estate became unaffordable to Indians.

Remonetisation was needed to formalise the economy and remove the mess of high value currency. We feel the Rs.2000/- notes won’t stay for long. Further Remonetisation was also required before the roll out of GST.

The only disappointment was that 99% notes came back. Many thought a lakh crore may not come back. But then thinking in hindsight, why should one throw away his money particularly when a declaration scheme was also announced. Post that, we have seen frequent raids, investigations, clampdown on shell companies etc etc. All these are by-products of Remonetisation.

Now the GST, Congress tried it hard to roll it since they knew it is going to benefit the country in long term and hence take the credit for it. But they failed to convince their own CMs and allies and hence failed. The present government will get the credit after 12-18 months and until then many people will continue cursing it and many optimists like me are hopeful that the present confusion will be a history soon.

When VAT was rolled out we saw similar pattern. GST is much bigger and hence more teething trouble. They naysayers, the pessimists will rejoice on one or two bad economic numbers but take it from me the country will benefit over long term. GST expects people to do business legally and those used to without bill business are shouting the most. Country is changing, instead of crying, change your business model else you will be wiped off.

Hence we need to ignore the initial teething problems and only then you can be a partner in the countries progress.

You can call 99% cash coming back into the bank as positive too. All this money is now legally getting invested in Financial Products. Earlier people used to avoid since it was all cash, now having ‘adjusted’ the amounts they are getting channelized. With falling interest rates and real estate prices under check due to remonetisation and other factors, people are choosing Equity Markets and Mutual Funds.

Are the valuations costly? No Brainer question, they valuations are sky high. Hence you need to be cautious and invest only with assistance of a Financial Planner.

Market is giving opportunity to all type of investors. Fixed Deposit investors can get better returns with reasonable amount of safety through proper planning. Long Term investors can spot value buys.

Let the pessimists continue with their negativity, just believe in India story and you would not regret. Once again, wishing you all a Happy Diwali and a Prosperous New Year.

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Happy Investing


Financial Planner & Wealth Creator


Most Investors think Markets can only move up

There is a saying: Bull markets can climb the wall of worry. That’s exactly what is playing out in the Indian markets right now. The Sensex seems disinclined for a pause, which does not mean it’s immune to surprises. The investors, as usual are ignoring the dark side of dipping their hands into rich valuations. Many of them are new to the galleries, driven to the ring due to invisible avenues of alternate investments.

The Fixed Deposit rates are at the lowest point and are expected to move further southwards. The appetite for Real Estate has withered away along with the high value denominating notes. Gold is just not willing to wink. Ignore the temporary craze due of Kim. These factors are driving even a newbie to the Exchanges assuming that this money making machine would never go for a maintenance halt.

After reading the above you may declare that I Am forecasting hell to fall loose, no I Am just cautioning the investors not to go on rampage. Keep in conscious that the higher you buy the lower tends to be the returns with high stakes. Hence we should welcome if market decides to cleanse some froth before the next move.

Valuations of most mid and small cap companies are running high. The flush of liquidity is helping them sustain. But as I said before, I Am not advocating a sell. But a churn in your current portfolio by reducing the overall standard deviation can buy you insurance against any rude shocks.

Can rude shocks strike? Yes there are many probable events, and in case such things happen, we would see value buying emerge. Not just Indian markets, the global indexes are performing well. Hence look at sectors and companies which are seeing order book build-up right now, but are also out of market flavour.

Most of us must be thinking that, on ground nothing seems to be happening. Markets are much smarter than all of us. They see what is coming and not what is. One of the examples of this is in the Global PMI numbers. Have a look:

Most developed nations are showing or have started showing dark patches of green. Most nations in the emerging markets section have also started showing patches of yellow and green, a welcome shift from the red ones. The valuations in the current market are not uniform, one can identify underdogs even now. Don’t risk buying stocks without an advisors assistance. People tend to buy stocks and invest in Mutual Funds on their own without any clue when to jump out of them.

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