From Equities To Eldorado

The much-anticipated first Budget of NDA-II did little for the economy. There is no sector, which has received significant benefits. Higher customs duties imply many goods will become more expensive. This in turn might dampen consumption demand. In addition, a surcharge on the super-rich affects Foreign Portfolio Investors who often work through trusts, which are now liable to taxation. Put it together and disappointed investors have started selling down stocks. This bearish attitude is quite likely to continue. It is not an unusual situation in terms of business cycles but it means that short-term returns from the stock market are unlikely to be good. If you are a long-term investor with the patience to hold for several years, this should not bother you. Keep investing via diversified mutual funds and your acquisition costs will average down. As and when the market recovers, your...