NIFTY BELOW 15000...TIME FOR WEALTH MANAGERS & FINANCIAL ADVISORS.

 It is time to get into the worst probability of markets coming down and the Ukraine - Russia  – U.S war getting into worst shapes. It is very clear that Biden is having immense pressure to act and get things dramatically changed in his favor to improve his leadership where his midterm elections get him to win. Its action with a politically driven purpose for Mr. Biden.  In between if the market had one tool for measuring the overconfidence-based investor decision then India should have ranked 1^st and also gut-based investment decision crisis award should have come to Indian investors only. We find significant changeover of the behavioral aspect of the clients going ahead if both financial advisors and clients come together to join hands and work upon this warfare game strategy. Will throw light on the same later part of the article.

Nifty might come down below 15500 and even to 15000  as this warfare and mid-term election-driven political actions come into play. Every asset class will have more wild swings and currency depreciation will be pain larger than the rate of interest hike.

 The United States will send Ukraine the M142 High Mobility Artillery Rocket System (HIMARS), equipped with munitions that will allow Ukraine to launch rockets about 80km, but Ukraine will not use the missiles to hit targets on Russian territory. Well, the last part does not have a guarantee about the use of the weapon by Ukraine forces.  This type of activity and more such acts are expected to come as we move ahead towards the midterm elections in the U.S.  We fear that most of these types of acts will either spook Russia to act more harshly on the war or further erupt a global warfare challenge. Everything is bad for Global stocks and for the NIFTY. From current to debt every asset class will go a tailspin.

If we look at the political picture of Biden we find that his approval rating is at a near-record low as the Democratic Party prepares for crucial midterm elections where Republicans could be poised to retake the House of Representatives and the Senate. Poll tracker Five Thirty-Eight assessed Biden's approval rating by analyzing a wide variety of polls and found the president's approval stood at 40.7 percent as of Monday, while 54.1 percent disapproved of Biden. The recent gun-related crisis followed by every failed economic prospect leaves strong difficulties for his midterm election. Now if warfare could be instigated the benefit goes to U.S and Biden. Sorry, we don’t have Osama Bin Laden today for warfare and for U.S economic growth and leadership portray.   America’s trade deficit of goods shot up to a whopping record $1.1 trillion in 2021 from $922 billion in 2020, leading to its largest-ever deficit. Imports dwarfed exports, reaching new highs of $2.9 trillion in 2021, while U.S. exports to other countries added up to $1.8 trillion. This means that the U.S is struggling with its own manufacturing and capability of production. The underlined numbers can be cooked but the gem cannot be hidden.

The current market has corrected significantly and many quality midcaps and large caps are available at good valuations but the whole mathematics might get upside-down once this warfare takes such turn around.

In these circumstances, the market might come down to below 15000. Well, think for the worst and hope for the best. Playing in options will be a risky bet for every investor and particularly for the new ones who have joined in the last 2 years riding on the bull rally. F/O become scarier and people tend to lose capital and even their net worth during this intensive volatility of the markets. Every good news is discounted and every bad news has a significant quantum impact o the market directions.

Buying small caps in anticipation that low price stocks will benefit in the long term once the war is over is a daydreaming act. Avoid investing in small caps and invest more in large caps and quality midcaps which is the best option for long investing. Avoid trading acts that one did during the last 24 months. Rather it’s time for creating a wealth book and not quick short-term trading options.

The time has come for investors to stop behaving like Fund managers and get back quickly to their financial advisors and wealth managers so that they don’t get into the DIY experiment lab at this point in time.  It’s time to go beyond asset allocation to risk profiling and measuring the risk-taking ability since the downfall of the market needs to be taken a hard look.  The new breed of investors will be the most impacted in these uncertain times and hence financial advisors need to accompany these generations. Remember that many of the new investors are even coming from the low to middle-income category segment hence they may not be able to pay your fees but they are investors with long-term determination for investing and creating wealth for themselves.  

This market is an opportunity to create long-term wealth provided the right choice of decision is taken and not based on gut feeling. Most of the investors in the last 2 years have significant overconfidence.  Avoid gut feelings and consult your financial advisor. If you are not happy with your current advisor then please change but don’t spend sleepless nights.  Many investors will disappear over the next 3 years from now which we are about to witness. SIP redemption and stoppage will grow and net inflows will decline.  Well, this is the behavioral change pattern of investors but the same could be managed and can be converted into an opportunity for long-term wealth creation if a DIY concept is abolished and financial advisors and wealth managers are consulted.