The Fed Chairman held out hopes for another rate cut to boost the U.S. economy which has been under a lot of constrainst, of late, due to the soaring oil prices, credit concerns and the weakening dollar. The rate cut should act as a shot in the arm for the economy which many analysts are expecting to enter into a period of recession pretty soon!
But well, all said and done, we have to wait and watch until December 11 to see what course of action does the Fed resort to keep the economy afloat! However, in the same vein, I must stress that rate cuts are not the way forward. Sure, in the short-term, they help inject liquidity in the markets but in the long-run, resolution of the underlying factors needs to be implemented for the economy to move forward again.
All of this should have a mixed effect on the Indian economy. Until the future course of action does not become clear, it would be prudent to hold on to your investments/liquidity and not react to the market moves!
Also, those looking to diversify their portfolio may look to invest their savings in the following stocks:
India Bulls Financial Services
DLF
Tata Motors / Maruti
Infosys
Tata Power
NTPC / PowerGrid
ICICI Bank
Ranbaxy
Bharti Airtel
Investments in the aforementioned stocks, in proportions not exceeding 20% of capital, will provide an invetsor with a diversified portfolio, capabale of generating returns >50% in the next 12 months!
Hope you enjoyed reading this post!! ;-)
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