TINA; the term to remember
Are Investors getting mature ?Â
Another financial year comes to an end. It has been an amazing year for the financialization of household savings in this country. Despite volatility in the global markets, India has relatively done better (though I would have preferred Indian equities to go down more 🙂 ). But the equity market’s volatility, is not what gets my attention. Volatility is par for the course, if you are an equity investor. I am more fascinated by this narrative, that investors have become mature and are ready to ride out the interim volatility. Some pundits believe that investors have also become focused on the long run. Well, I am not really sure. Hey, I am not a pessimist, in fact, quite the opportunistic optimist (if ever there was a term like that). Let me explain:
Expanding TINA
My favourite term, that I have been using all of 2021, is TINA. If you are an avid political reader, I am sure, you would have heard of the term before. TINA is nothing but ‘There is no Alternative’. Investing world currently suffers from that. Look at the four major assets (easily available to non-institutional investor); equity, debt, gold and real estate. You can add cash as the fifth option, though it really isn’t an investment option ( it is an asset though). Debt returns are subdued. Real estate in the preceding 3-4 years has been flat  to negative (except in my city; Hyderabad). Gold has also been flat too in the last 18 months.  Keeping cash  in a hyperinflation phase that we are in,  is akin to losing your principal.
Can the cycle reverse ?
That brings us to TINA 🙂 and hence equity has been investor’s preferred choice. However, cycles change, equity returns over the next 1-2 years might not be palatable for most, forward looking debt returns might go up, value buying in real estate might make it look attractive again. Like Mike Tyson said, ‘everybody has a plan, until they get punched in the mouth’ :-). It would be interesting to see how this pans out in the investing world.
This isn’t bad news for equity investors at all, in fact, it would provide reasonable opportunities going forward. However, nothing less than 5 years should be your investing horizon and you would do well to not base your return expectation to the last 2 years
Disclaimer :Â The opinions expressed in the Blog are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product. Â It is only intended to provide education about the financial industry. Â The views reflected in the commentary are subject to change at any time without notice. Image has been used only for representational purposes. While lot of care has been taken to validate the data , neither BuckSpeak nor any of its employees should be held responsible for its authenticity. Investments are subject to market risk , please engage with professionals to take better investment decisions.
We like to share links to articles and information which is interesting to us. Â It is in no way an endorsement by us or by anyone associated with us.