Have not commented on the state of the country for a while. Mainly because I am plain disgusted with what is happening. No one cares for the common man. In the hurry to jockey for political positions, the politicians have forgotten about factors that affect the nation - inflation.
Inflation has touched 11.89% and even the master spinners in the Financial ministry has conceded that it is likely to break the 12% mark and might even touch 13%. We have been given assurances that inflation is likely to come down by mid september.
Not many people know that this mid-september magic is keeping in mind a bountiful monsoon. Here lies the catch. The monsoon has failed miserably. Country is in serious trouble with agriculture production and energy production seriously affected. History has shown that whenever monsoon has failed, GDP growth has been affected and inflation has gone up. This year the scenario is grim in view of the global food and energy crisis. We are in for a rough ride.
So with inflation hitting the roof, where should you invest.
Stock market is down to 13000. This is likely to touch 12000 but in one year expected to maintain the 18000 range. This is a nice time to buy shares as most of the blue chips are underpriced. Recommendation is to buy shares of companies who have excellent management.
Gold - Never underestimate Gold. It has outperformed other investments in recent times. Invest in gold but as usual the caveat - don't go in for ornament gold. Investment should be in gold bonds, futures or solid 24 carat gold bars or biscuits.
I won't recommend Bank Fixed Deposits, Mutual Funds or even Real Estate at this stage.
Have a diverse portfolio with 50% in equity shares, 40% in gold and 10% in cash or liquid investments.
