The earnings growth rate of Indian Corporates would not be as high as 30% recently, but 10-15% growth over a longer term is achievable. This rate is attractive when compared to the negative earnings rate in some developed countries that would like to achieve it. But FIIS are selling. Domestic consumption and investment demand continue to be strong in India.
Consumption in the US is contracting every hour. India’s savings rate continues to be higher at around 32%, while the savings rate in some of the developed countries are negative. There are no major job losses and people continue to spend on mobiles. TV’S, refrigerators and other things. The wage growth in India is one of the highest in Asia.
Stock markets and equity mutual funds are vehicles for long wealth creation. Retail investors have to invest regularly in a disciplined manner and be patient for the results. As the Indian economy’s fundamentals continue to be in a reasonably good shape, irrespective of the high oil prices and inflation, India is certainly not heading for an economic slow down from higher historical levels. Also, the two quarters in the year 2008 has moderated many of the unrealistic expectations from India stock markets and its economy. So, keep investing and remember the most elusive factor for the market now is finding a bottom.