Dear Investors,
The month of September was interesting with markets witnessing a 3.6%* rise, a fortuitous turnaround after the decline seen in the past few months. Markets reacted to the government’s decision to cut corporate tax to 22% (before surcharge) from 30% earlier, substantially reducing the tax-burden on corporate entities. The government also cut tax, to an effective rate of 17%, for companies looking to set up new manufacturing plants.
The announcements came as a direct result of the concerns around the economy’s growth trajectory and also furthered the government’s agenda of reviving economic growth through structural long-term reforms. It also signaled that the government is focused on making India more competitive among its emerging market peers.
Globally, situation remained tense. Trade tensions persisted as did the protests in Hong Kong and Russia. Two Saudi oilfields were targets of a drone attack which severely impacted short-term oil supply and raised concerns about the long-term supply of oil by the second largest oil producer in the world.
Domestically, overall concerns remain with macro indicators such as GDP, IIP coming in weaker, but there is a sense of hope in the market. With the festive season around the corner, retail demand is starting to see some pick-up as evidenced by e-commerce companies’ festive sales numbers.
While many in the market had been rattled by the volatility seen over the last few months, the month of September came as a respite. For those who stayed with their investments and did not get swayed by the noise in the market, this would have been especially fruitful. Markets will be volatile and fluctuate heavily but for long-term investment, investors should weather the storm patiently.
Warren Buffet once said, “The stock market is a device for transferring money from the impatient to the patient.” Investments in mutual funds particularly, should be for the long-term as it is a device for wealth-creation and not just return-generation. SIPs in mutual funds is probably one of the most efficient way of gaining equity exposure as it helps lower overall risk and also benefit from the power of compounding to generate risk-adjusted returns. Be it short-term or long-term, mutual funds can help you in reaching each of your financial goals through adequate financial planning.
Last, but not the least, with the festive season upon us, let us hope the coming year brings with it good fortune for all.
Have patience, stay invested!
Warm Regards,
Ashwani Bhatia
Managing Director & CEO
