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Covid 19 - Global Financial Crisis, Investment, Opportunities, Returns - Tata Mutual Fund


Ennette Fernandes
Assistant Fund Manager

Global Financial Crisis

Masks and Gloves. Never imagined myself, to be geared up so for my usual grocery shopping outing, but unfortunately this is the reality now. Covid is one more “Black Swan” event in our lifetime. The last one was the Great Financial Crises (GFC)of 2008‐09, which also had global ramifications. However apart from this there have been numerous other geo politic and socio‐economic risks, that have occurred intermittently. If we simply look at the timeline since the GFC, after the initial struggle, economies did stabilise. Income generation recovered for developed economies and improved for the developing countries. New age companies like the FANG (Facebook, Apple, Netflix, Google)stocks, Ali Baba became businesses of the decade, and also stock ideas of the decade. Apple with market cap of $1.3 trillion, generated 24x returns since end 2008, and is trading at only 24x trailing PE ratio. India too has its own share of successes in the start up eco system, with 24 unicorns ($1 billion valuation), India ranks 3rd highest globally.

India's GDP rank jumped up significantly, from 12th with $1.3 trillion GDP, is now 5th largest in the world with GDP of $2.3 trillion. The per capita income now crossing the important threshold limit of $2000. All these achievements are fairly represented by way of healthy stock market returns. From the lows of March 2009, Niy has generated 11% compounded returns despite of the recent sharp market correction.

Hence clearly, few relevant points: occurrence of risks, with varying magnitudes only lead to temporary setbacks. Recovery, pick up in growth and new opportunities coming out of advertise does play out. India structurally well placed to be one of the fastest growing economies on medium to long term basis backed by demographic dividend, formalisation, low penetration opportunity and income growth. Long term equity market investing inspite of the various headwinds does generate returns beer than risk free rate. Trying to me the market is akin to crystal ball gazing. Rather market corrections, should be leveraged on to make investments, to ensure beer compounding returns. So while we all are analysing our individual balance sheet and trying to ensure adequate liquidity and capital, but NOW is also the me to make that investment and opportunity for higher returns.

Happy Investing

Disclaimer: The views expressed in this article are personal in nature and in is no way trying to predict the markets or to me them. The views expressed are for information purpose only and do not construe to be any investment, legal or taxation advice. Any action taken by you on the basis of the information contained herein is your responsibility alone and Tata Asset Management will not be liable in any manner for the consequences of such action taken by you. Please consult your Financial/Investment Adviser before investing. The views expressed in this article may not reflect in the scheme portfolios of Tata Mutual Fund.


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