Wealocity blog

Wealocity's perspective of the market happenings  Monthly Market Commentary

Experiential Luxury A shift in focus from purchasing luxury goods to enjoying services. A common refrain of the past half-decade has been the decline of luxury ‘ownership’ and the rise of luxury ‘experience’. If this is to believed, then we're moving away from permanent, physical object ‘possession’ and ‘personal luxury goods’ into transient, intangible, service-dominated ‘experiential luxury.’ Experiential luxury is one-off and unrepeatable. This makes the moment of experience ever more important.

RBI Monetary Policy Two key aspects of RBI's commentary are: Hawkish inflationary outlook while extremely optimistic about growth in the coming FY; and serious intent to solve the NPA problem of the banks. While sticking to the medium term target of CPI to 4% within a band of +/-2% it flagged multiple risks to inflation. These include the probability of recurrence of El Niño and it's impact on food inflation, 7th pay commission receipts, one-off GST effect and even the farm loan waiver in several states. Rupee Conundrum The rupee rise in the last quarter caught almost all the analysts off-guard, revising the forecasts for the quarter and year. RBI's gauge of the currency's strength puts in the overvalued territory. And it's non-intervention though perplexing is a wise move as any aggressive buying of dollars would only add to the excess liquidity it's trying to suck out through reverse repo rate hike. We see the trend to continue in the medium term. The Syrian War The US has thrown a wrench in to the ongoing Syrian repair, unsure of which nuts and bolts it wants to tighten or loosen. So, this sudden US reaction to an alleged chemical attack by the Assad admin to be considered genuine or a POTUS ploy  to reverse the ever falling approval ratings is unclear. Musings also indicate the sustenance of new tax cuts and hiked spend proposals need more political mileage especially post the failure to replace 'Obamacare'. But this misadventure could add chaos to the Middle East.

What's in it for you: ‘Bull markets are known to be born on pessimism, grown on scepticism, mature on optimism and die on euphoria'  ~ Sir John Templeton.   Equity: The recent political victories have changed the sentiment and is attracting huge inflows both domestic and foreign. At Wealocity, we've used these higher levels to create cash reserves and believe this strategy would help us grab an impending opportunity. Probably time to bet on the infrastructure theme again!    Debt: With the change in RBI stand and the subsequent events, there could be possibilities of profitability in the long papers and hence are interested in the dynamic asset allocation based investment avenues. Crude: The Domestic price would be dependent on the USD parity, though the recent gains in the global prices is a combination of demand (US summer spends) - supply (shutdown in Libya) issues. The current geo-political tone would add more volatility to it. Copyright © Wealocity, All rights reserved. Our mailing address is: dreams@wealocity.com Disclaimer: All the views expressed are strictly personal and we recommend consulting your financial advisor for making any investment decisions based on your risk appetite, timelines and goals.