- May 2014
- December 2013
Ruby Jacob, 22 Jul 2010
This year, the monsoon seems to be doing reasonably well. Yes, we do hear contradictory reports in the press - the usual noise around its unequal distribution and dry patches in between. And of course it's still too early to call. There is the entire August and part of September to go before a final verdict emerges. Yet, especially compared to the disaster of 2009, this seems far better. More importantly, only a considered call taken now is useful as an investment decision - not one that is taken after the results are all in and a consensus has been built around how the monsoon has done.
What does it mean for me?
We are no weather experts, even if there is someone who can be called one. But we do believe that if an intelligent call can be taken based on the available empirical evidence, some good investment decisions can be made.
First, if the monsoon is indeed normal or surplus, it is good for you even without doing anything in particular. Besides the freedom from water shortage, it also means a good economy. Agriculture does well, food inflation is likely to be tamed, and the feel-good factor percolates to the rest of the economy over the next few months. This is likely to translate into good job security, stable prices, and even adecent raise in the coming Financial Year.
But as an alert investor, you can explore interesting options and place some considered bets. This may be a good time to get some exposure to rural demand oriented sectors like Fast Moving Consumer Goods (FMCG). White goods (like electronic appliances) and even telecom should see good demand, if indeed the monsoon does well. You can explore funds or stocks in these sectors, and, after some further research, opt to increase exposure.
Conversely, in the event that the monsoon fails in the remaining months of activity, you as an alert investor should pare down any exposure to these sectors. Remember, the important thing is to decide and move before the media and the market catch on. Of course there is a risk - but that's what active investing is all about!