Recently, I was asked by one of my commodities friends, who’s always heavily invested in precious metals; that what could be the best investment for the future. To him and all of my investment loving friends, this blog post if for you.
As I write this blog post, $NIFTY and $SENSEX are above 5300 and 17500 levels. These are very interesting levels to watch for. And, people who follow Indian stocks would agree when I say, that since some weeks, the Indian stock market is in for the next probable bull leg.
There are couple of reasons why I believe the Indian stock market, along with the other Asian stock markets (NIKKEI, SGX, TSE), are going to be the future. The Western countries of our world are facing many challenges today, ranging from higher inflation to breaking down of economy to bankruptcy of major banks/investment groups. When the MFGlobal issue popped out, it sent spiralling shocker waves across the globe. Who believed, that an investment giant would collapse in an overnight. People’s hard-earned money and wealth instruments were all in jeopardy of being lost.
The reason is more clear. It is because the government takes appropriately wrong steps in bailing out using people’s money. The money which is collected as taxes from the people. They pay tax, thinking the government would help them provide with better facilities/medication/jobs, etc. They did not pay tax, so that that reserve money is used to bailout some ill-fated companies.
When the chief of the Swiss National Bank was questioned about the transactions his wife had done, he had no clue; now could we believe that fact? And, on the same grounds, who knows what is the reason behind these economic downfalls, and occasional uprisings we see every next day?
Why I am saying to have your investments in Asian countries is because of many reasons, but the major fact is, that the US dollar which is termed as “World Reserve Currency” is losing its stature, credibility, etc. A currency remains “World reserve currency” as long as the world accepts it. USD has already started to lose its status. People in many countries have stopped dealing in terms of Dollars. Many people have already shifted their investments from the US Bonds to other Asian countries’s debt instruments. In the last month alone, there has been huge participation of Foreign Investors in the Indian stock market. Not only India, but people all over the world have begun to invest in stock markets of other Asian countries such as Japan, China and Singapore. Oil, which is the major commodity that is traded in terms of USD, world over; have now other tools for the trade. One country is exchanging other commodities in return for Oil.
This change is not drastic at the moment, but it may gain momentum any time. Remember friends, little tides create a huge tsunami. The southern part of my country never knew the term “Tsunami” until it was hit with one. Some years back “GBP” used to be world reserve currency, but it too fell one day, and may be “USD” follows the suit soon; unless there is a “True Saviour”.