RBI’S policy announcement on 5^th Aug will decide trend for both equity and debt market. We expect RBI to increase Repo Rate 35 BPS to 50 BPS.Repo Rate may peak in Feb 23 at 6%. Looking at macro indicators, Current situation looks fine but it all depends on crude oil prices. If crude oil prices start increasing this winter. (Mind you even after Fed’s aggressing rate hike, unlike other commodities crude oil not corrected much). Then our fisc and CAD will affect negatively. We cannot afford to have High CAD deficit. On rupee front RBI managed it well so far but we believe depreciation of rupee is on the card, otherwise we have to make a lot of internal adjustment.

     In this cycle G sec will settle between 8-8.5(may be) will give good entry point for long term investors. In India for timing guy, gets opportunities. In debt first and then in equities.so we believe debt and equity funds will Do well. Role of advisor is very important in this kind of volatile market.

                                                                                                                                                                                                               Short Note by

                                                                                                                                                                                                               SANTOSH AKERKAR

       Macro Indicators are suggesting a change of Era. We have had a long Goldilocks Era (low inflation and low rates) for the past 20 years where everything’s worked really well. Now inflation is surging high in India as well as around the world. There are many reasons for high inflation, supply side issues, Geopolitical tensions and easy money policies of central banks particularly during pandemic. We feel that central banks will prefer tame.  Inflation over growth:  It means higher interest rates are here to stay. We strongly feel that the peak of inflation is ahead in India rather than behind. RBI’s 6% Inflation target is not rising but will become floor.

    Inflation is harmful for the people who are at the bottom of the pandemic particularly middle class and poor people. 

                                       WHAT’S THE SOLUTION

1.      Learn to live below your means. Track our Income and expenses. Be disciplined about your Investments.

2.      Need to create passive income or cash flow to fight Inflation.

3.     Asset allocation is key.  It's important to stay in both equity and bond and will give great opportunities to invest.

4.     Balanced Advantage funds or Hybrid funds will do well. 

5 Avoid direct stocks investment and trading – losing less is more than earning more. Stay with a mutual fund where experts manage your Investment.

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