Short Term Volatality

The slide in the global market has again brought to the fore front, how we are so much integrated with the Global Market.

If you go to the bottom of the issue, it is basically the short term leverage money which is creating problem in all the slides. These short term money are basically in the nature of leverage money which has been ruling this world since last few years now. This started after money was cheaply available in Japanese Market. After the 2000 slide, Japanese economy went into recession where inflation went into negative and money was available in abundance. I remember one of the Japanese Investor invested in New York Real Estate at its peak and was and has not been able to recover the cost till date (I may be wrong with the has not been).

Well, the last week's slide was also because of the same reason. Yen started becoming stronger compared to US Dollar and that would have obviously put pressure on the margin which investors would have made due to the leverage which was available when Yen was weaker.

Also, there is increasing pressure on China to devalue their currency and that would affect the margin of the Chinese Exporters. Housing Market in US has also added fuel to the fire.

Almost 50 % of the FII money come to India as Participatory Notes which are not identifiable. Moreover, as per the report from National Security Advisor in India, money from underworld is going around and coming back to India through hawala and FII.

As far as long term story of India goes, it would definitely be great. This makes more logical sense since Indian Economy is consumption driven and large number of population is young with lots of spending power.

So, friends, be long in the market and do not worry about the unwanted volatality which you see every year. If you are convinced about your stock investment, do not worry about these ups and downs and stay put. Its a long haul for the Indian Market.