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With global financial markets standing on shaky ground, investors are treading cautiously. Uncertainty looms large—from interest rate movements and crude oil price volatility to trimmed GDP forecasts. To help investors make informed decisions, Anand K Rathi, Co-Founder of MIRA Money, has listed five critical points to consider before investing fresh money in the current scenario.
1. We’re in Unknown Territory—Look Inwards, Not Outwards
“We live in an unknown territory today and hence it’s time we analyze a little more than usual before investing,” Rathi says. With rising global uncertainty, especially amidst trade tensions and geopolitical risks, he advises investors to shift focus from global cues to domestic fundamentals.
2. Indian Equities Not Cheap—Lower Your Return Expectations
Rathi highlights that Indian markets are neither cheap nor overvalued. “The GDP forecast is also trimmed down by all rating agencies and RBI. We may see lower EPS growth,” he says, urging investors to dial down return expectations to single digits or low double digits due to the current unfavorable risk-reward ratio.
3. Debt Looks Promising as RBI Focuses on Growth
Central banks globally are using interest rates to navigate inflation and growth. Rathi believes RBI appears determined to stimulate growth, which could push yields lower. “Good time for debt investments,” he adds, suggesting a tactical shift towards long-term debt instruments.
4. Crude Oil and Dollar Trends Could Benefit India
Rathi points out that falling crude prices and a weak dollar offer a significant advantage to India. “If only the government can pass on the benefits, it would be great for consumers,” he says. These macroeconomic factors can positively impact inflation and consumer sentiment.
5. FIIs Have Already Sold—India Still Resilient
Despite heavy foreign investor selling, India remains relatively better positioned due to its lower exposure to US trade and tariffs. “Even if US Yields go up, India may see lesser FII outflow,” he explains. However, some volatility may persist.
The Investment Strategy: Staggered Equity, Focus on Debt
Summing up his investment strategy, Rathi says, “I would go a bit high on long term debt and spread my equity investments over a 3-6 month period. Faster deployment if earnings pick up, slower deployment if GDP slows.”
As markets continue to oscillate between hope and caution, Rathi ends with a thought-provoking question:
“What are you doing with your new money?”
