All the way to 2018?

Today's Financial Express had a nice article on what an investor can expect from equity markets over the next decade. The article concluded with the following lines:

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The bottom line is the bulk of equity price declines are behind us, but the equity market is unlikely to recover quickly as a whole. Returns will come from stock picking not market timing or asset allocation decisions. But be aware that while in the past markets were overly optimistic, ignoring any bad news, we are currently in a position where markets are pessimistic and they appear to be ignoring an important bit of good news from the oil markets. So study your stocks now and creep back in, very, very slowly. Add to positions, no faster than 5% per week. The best traders are good averagers.
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I concur with the author of this article and am of a firm belief that markets hereon will indeed be a stock pickers heaven given that a large part of price destruction is already done with, nevertheless, on the whole I am not as bearish.

The entire article can be read here [link]

Last two months the Most volatile ever...

...atleast since 1997.

I am trying to get hold of Sensex data prior to 1991, which might indicate whether we've been _here_ before (in terms of volatility) for such an extended period of time. However, it is quite clear from the post that bull-markets have begun only after a prolonged period of low volatility (as was the case in 1998-99) or during (2002-03). So the next bull market may only come about when we witness a dramatic drop in volatility, that too over an extended period of time. Even in December we've had days of sharp moves, both on the upside and on the downside.

















The bigger question is: whether this is an opportune time to make long term investments?

Inspired by series of such threads initiated by:

Dr.Ajay Shah: Crisis Watch
Kaushik Gala: Daily Dose of Deflation

I am initiating a new thread "Time to Invest: Dec'08-Jun'09". This is because, I personally believe that this indeed is a good time to make long term investments. Markets may come back to re-test the lows of Oct 27, or it may have already bottomed out. But, we are surely not looking at another bull run for sometime now. However, that's the advantage one has, if one is looking to make long term investments.

Inflation down to single digits; Dow down 400 points...

For the week ended November 1'08, inflation in India (as measured by the WPI) dropped sharply to 8.98%. [read here]. This is clearly a positive.

But, will we embrace the sharp the drop in inflation or will we discard it and follow stock markets across-the-globe to sink further?

Video - NNT on Risk & what lies ahead...

Uncertain Times: Threat or Opportunity?

Uncertain Times:

• Domestic Non-bank credit is as good as gone
• Overnight rates are on an average higher than 3-yr Fixed Deposits
• A sharp slowdown in the overall economy, led by the mfg sector
• Slowing sales and rapidly deteriorating profits and profitability
  
• Thanks to higher interest rates, rapidly deteriorating corporate India's performance, consumer demand too remains poor and is expected to only worsen hereon
  
• Stock markets continue their rapid journey down-south
  
• Serial bomb-blasts taking place across-the-nation, city after city
• National & a host of assembly elections coming up with no certainty or clue of who will form the new government
• Disputes amongst state politicians over jobs & reservations (Mah, Bihar, & Assam)

Testing times (that's quite an understatement) for the Prime Minister, the Finance Minister and the RBI.

However, as an investor, how should one see and behave in such a scenario? Is this a threat or an opportunity of a lifetime to invest?