Was it just me or did you also feel the visible tightening of the purse
strings on Diwali? The roads in NCR (which is Delhi/Gurgaon for me) that are
jam-packed on days prior to the festival of lights were empty. The sweet shops
that are overflowing at the rim on these days wore a deserted look. Everyone
talked about how much money stocks had lost and how hard times are around the
corner. Last week even we reported how leading sub-distributors across India
claimed that this year's sales have gone down by up to 40 percent.
All conversations these days are centered on how stocks have gone down and
how people are going to lose their jobs. But is it really all that gloomy? Are
these signs of hard times? Well actually no. Whatever anyone told you please do
not buy that the Indian economy is going to go down to the level that US economy
has. Yes, there might be a slight slowdown, but a complete downturn is not
possible.
I will tell you why I feel that way. Over the holidays I caught an
interesting discussion on television where experts on economy were discussing
impact of downturn on India. And they were unanimous in agreeing that India has
too strong a domestic market to go under easily. The growth rate might go down
from 9.5 percent to eight but will not touch five. Also, please remember plastic
money is an option, which very few take in India. So we are not as much in debt
as US or countries in Europe who live on plastic money.
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Shivangi Yadav |
The other reason is that while all sectors in India might have said that they
did not see sales, gold and silver defined trends. On Dhanteras, which was a
Sunday, a day when most banks are closed, I walked into a bank that had opened
their branch for special transactions. At 7:30pm, I had to get in a queue to buy
the customary gold coin. And it was not just the moneyed but people from all
walks of life who were making the purchases. Similar instances were witnessed
across the country. So my question is, would you do that if you were on a
shoestring budget? I for one sure would not. Then what does this tell you? That
people are wizening up and in India they do that pretty fast. Since we have
historically been a nation of savers rather than spenders, we tend to go in for
wise investments. While it was stocks and realty last year, it is gold this
year.
Also, Indians have a tendency to be long-term investors, a discussion in one
Diwali do that I was a part of was centered around tips on which share to buy at
what rate. Would this happen in an economic downturn? I doubt it.
Ground rule then is to be sure where you put your money and be an investor
for long term in whatever you choose to invest. Short-term gains are big but so
are the losses, but long-term investments usually pay off. So be wise and reap
the benefits.
shivangiy@cybermedia.co.in