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D.Muthukrishnan (Muthu), Certified Financial Planner- Personal Financial Advisor

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Good years are ahead

Posted by Muthu on January 15, 2015

Wishing you and your family a very happy Pongal.

RBI has given us all a Pongal gift. It has cut repo rate by 25 basis points (0.25%).

Raghuram Rajan has been very clear that he would start cutting rates only when he is confident that inflation has permanently come under control and the government follows a good fiscal discipline.

He had a target of 6% inflation for January 2016 and is now confident that the same would be achieved and maintained. He envisages a long term inflation of 4% (+) or (-) 2%. So it would be in the range of 2% to 6%.

In the last 17 months, Rajan has done a wonderful job in bringing down the inflation under a firm control.

Rajan has also made it clear that his monetary policies would be consistent. Once he starts cutting the rate, he is likely to move only in the same direction. So we are heading for a low inflation- low interest rate regime during next few years.

As inflation is getting lowered and interest rate comes down, investment cycle in the economy would pick up. Profitability of corporate India would go up. Margin expansion will happen.

We expect a phenomenal performance in both equity and debt instruments in the years to come.

You’re all very disciplined equity investors through SIP. You’ve already started experiencing the rewards for your discipline. You may not fully realise yet what kind of rewards are awaiting you in the years and decades to come.

Other than emergency fund, we’ve been asking you to keep the FD (Fixed Deposit) money in MIPs (Monthly Income Plans). Those of you who listened to us have already been rewarded well in the last few months. For some of you who may be waiting, even now it is not late to consider MIPs. MIPs are any time product. We expect an above average performance from them in next few years.

Good years are ahead for our country, economy and markets. Increase your participation by increasing your SIPs.

Thanks to Rajan for giving such a sweet gift on Pongal.

3 Responses to “Good years are ahead”

  1. தமிழர் திருநாள் வாழ்த்துக்கள்……….Sir……..

  2. ratnakumar72 said

    Iam very inspiring with your articles,,,welldone mr.muthu..

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