" C ash combined with courage in a time of crisis is priceless."  -  Warren Buffett With 2021 coming to end, now is the time to take stock of the year gone by and plan for the year ahead i.e. for 2022. On fundamentals Indian economy has crossed the pre-covid peaks. Bank’s NPA are reducing, capacity utilization, GST & direct tax collection, corporate earnings etc. are quite satisfactory. Just one word Covid or its Omicron variant changes the mood of the analysts.   Most of the pandemics emanated from poor or developing nations. But corona had turned the table. It started from China and spread through developed nations particularly US & Europe before engulfing the whole world.   Its new Omicron variant is repeating the same pattern. And number of active cases and deaths due to covid are on the rise again. India thus far is best placed in terms of new cases and covid mortality. But the way it is increasing among the developed nations definitely mandates extra

  Stock market’s behavior is highly volatile, just like a child. Their mood swings are quite similar. To the same chocolate the child may start jumping with joy and at times just throws it down in anger. But in the end, you make your child happy and the child hugs you, filling joy in your life. So are the equity markets.   Over last two years stock markets have swung to extremes on both the sides. While in March 2020 it offered one of the best opportunities to invest. And after that it didn’t let anyone ride the rally who missed boarding the bus at that time. It not only recovered its losses but galloped to much greater heights though not commensurate to its strengths i.e. earnings.   Slowly economy too followed the stock markets. And it has now almost crossed the pre-covid level. Additionally corporate took advantage of the covid situation and the covid packages offered by the governments, to reduce their costs and reported higher profits.   In our October communication we

Ships don’t sink because of the water around them but because of the water that gets inside them. Similar is inflation, it sinks your returns.   With interest rates on bank fixed deposits hovering around 5-5.5% for all major banks and inflation more than these interest rates, investors are in a fix as to where they should invest their money that will earn better returns and provide reasonable safety.   Alternate comes to private company fixed deposits and bonds. Even here interest rates on good quality bonds or corporate deposits are around 6.5-7% which is taxable. And even this return is hardly sufficient to beat the inflation. Equity investments though offer good returns over long term (minimum 5 years or more) but are riskier for short term.   In such scenario if the investment horizon is 3 to 5 years then balance advantage funds offers a good option to bank FDs. These schemes invests between 30% to 90% in equity markets depending on the parameters they set for determini