SHOULD WE BUY THE FEAR?

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           SHOULD WE BUY THE FEAR?


Dear Friends

Once again we are at a point where everybody is sceptical as to should we buy the fear or wait?

If we look at the current scenario, nothing is supportive in the market. Firstly, the liquidity seize by major economies. Secondly, expecting fed rate increase soon. Thirdly the inflation is hovering at multi decades high and last but the least Russia and Ukraine conflict converted into war. Should we buy fear at this juncture? I would say yes but wait for the opportune time. 

The domestic liquidity is enough so we need not to worry as far as liquidity is concerned. Rising crude is a cause of great concern under the current situation. However, we have seen in the past also that crude has its own cycle and over long run it has to come at a logical level. There has been supply disruption right now but once opec start increasing production, the crude will itself decide what should be a logical level price wise. Further, world as whole looking for green energy as a substitute and sooner or later the demand for crude is likely to fall in future. 

As far as Russia Ukraine war is concerned, we have seen all of this in gulf war also, when market fells 15-20% then rose above pre gulf war level within six months. So in geopolitical situation market tends to overreact and this time around it is going to get manifested in higher commodities prices. All of that means that there is more pain on the downside. So keep your war chest ready to be able to buy at lower levels. We are going to fall further before rising again but we will rise.

Good luck friends 

-Rajendra Jhanwar






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