The best time to plant a tree was twenty years ago but if you have failed to do that, then the next best time is probably now. This is a useful investment maxim to remember when markets are volatile and unpredictable. I believe that although it has its origins in Africa it is probably very relevant to the India of today.
In January of this year I wrote an article on the subject of investing in India. At that time I said that the Neptune India and Jupiter India funds had risen in value during the previous ten months by 50% and that this rise would be likely to continue. It did, and by April 2015 they had risen by another 40%, up 90% in total. Then came a correction, possibly connected to the calamitous fall in the Chinese stock markets. By July 2015 both funds had fallen by 30% only to rise again by 20% and be back today within 15% of the previous high. So the big question is, will the Indian markets continue to prosper, and is now the time to jump back in? I had finally exited both funds by June this year after making my original investment in October 2014.
Recently nothing much has changed. Prime Minister Narendra Modi`s investment friendly policy keeps India on a buoyant path of recovery. The sweeping changes to archaic labour laws and the breaking down of the restrictive land development laws will continue to create many hundreds of thousands of new jobs thus lifting the country`s tax revenues. Christine Lagarde, the International Monetary Fund`s managing director, told students in New Delhi that “In this cloudy global horizon, India is a bright spot”. The world needs a strengthening India to counterbalance the weaknesses in the West and emerging China.
To me, this Indian economy would seem to be progressing nicely and I have reinvested. It is worth noting however that Mr Modi is far from liked by a large percentage of the Indian population who see him acting for the rich, leaving the poor to take the crumbs that fall from their table. So unless he is able to make noticeable improvements to the living standards of the poorer parts of Indian society we can expect there to be some unrest. This unrest is starting to show already in poster signs and graffiti. The following are a few examples….
- India is a country where the people are thin and the police are fat.
- India is a country whose rich believe in simple thinking and high living.
- India is a wonderful nation where daughters are neither safe in the womb nor outside.
- In India, whether you are interested in politics or not, politics is always interested in you.
- In India, you don`t drive on the left of the road, you drive on what is left of the road.
I guess it is only natural that as Mr Modi and his government push their changes through the Indian parliament it will cause a considerable amount of unrest until the benefits are felt by the majority.