Sunday, December 14, 2008

 

Things will take time to look up

The recession in the world economy will take time to look up. The US is right now a year into recession, with unemployment rates reaching scary rates, not seen for many many years. The Big 3 automakers are in real trouble right now, fighting for getting funding from the US Government, and right now, that funding looks in trouble since the US Congress has refused to grant such a funding. Companies have been firing people left right and center, forcing much more instability into the entire economy.
The market in India has also been severely impacted, with growth in many industries and sectors very badly impacted - the realty market is down, rentals are down, auto industries are down, consumer durables are impacted, and so on.
The market remains depressed, and even the announcement of a reduction in petrol and diesel prices, along with a Government push to go against its fiscal responsibility norms and push more money into trying to pump up the economy and growth in the infrastructural area has not had much of an effect to the market. Even when the market goes up to some extent, there is always the worry about how transient this growth is, and there is always an expectation that the market would again fall down. Right now, the sentiment remains negative, and people who have invested money in the recent past have also lost market, making people apprehensive about investing more money in the market.
Typically, as per all market literature and investment books, this would be a good time to invest in fundamentally good companies, but the upside will take time to achieve (maybe upto an year).

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