When and where to invest in 2024

INTRODUCTION

Well, we all know that the markets are booming all over the world, but the general question that arises is whether we should Invest in this market or not.

Now we can see that any security that we are trying to purchase is already over-priced and people are willing to pay more but as contradicting concepts, people are also thinking about not buying much, due to the rumors that are present all over the news platform.

I intentionally didn’t blog any article after my Future trading one, the reason being markets were too volatile and I was relatively busy managing my Investor’s money, well I have been investing since 2016 and I haven’t seen anything like this but one thing I can say that if we move on to history we will see a lot of this kind of things that have already occurred.

LET’S UNDERSTAND HISTORY-

we generally listen to our parents and grandparents saying how cheap they used to buy things, now over decades it has changed a lot – yes I know you that the answer to this problem is basically “INFLATION”.

apart from inflation, if we observe that there are sudden things that no one has seen before and it’s happening in our lifetime again that doesn’t mean that it hasn’t occurred in history, if you see the last 500 years of history you will observe that these conflicts have been repeating over the past on and on.

we are generally observing two things in today’s market according to my perspective- (I could be wrong ) 1- hiked interest rates and 2- high printing of money which is causing high leverage.

in India, the REPO rates are almost all-time high at present, this is because in past years the borrowing has been too much by the public, organizations, and country – so since there was too much borrowing in the last 5-6 years and too much printing of money.

EFFECTS OF BORROWING AND PRINTING A LOT OF MONEY-

So, the first question that comes up is ” WHY DOES A PERSON OR AN ORGANISATION BORROWS MONEY” To answer this I would like to say that whenever a person’s expense exceeds their income then the only way to solve this problem is to borrow money and generate a debt.

the moment the debt of an individual or country rises more than its income the central bank has only one option which is to raise the interest rates because the higher the interest rates lesser the borrowing and the more the debt repayment.

so you observe the people who had debts ( loans, mortgages ) are selling their debt securities ( means whatever they had bought via debt i.e – house, car, etc) which is making the prices go up since they need buyers who are willing to pay off their debts and under such pressure they are forced to sell things which should make the asset prices go down.

but relatively none of the asset prices are going down rather they are going and generating new highs every single day. well, this is what I say about inflation.

So i would like to conclude that the central banks of all countries are trying to maintain the debt-to-liquidity ratio just by printing money and keeping interest rates high so that the cost prices don’t hike and they could stimulate the economy relatively.

if you want to observe how central banks’ history here it is

THE CENTRAL BANKS HISTORY-

I would like to convey that the central bank represents the second government of each country after the central government, for India, the central bank is relatively known as the RBI (Reserve Bank of India), and for the United States it is the FED, and so forth for every other country.

in India, you can observe how the repo rates have changed dramatically, over the years for example how repo rates work -( if a bank is lending you money for around. 9.15% in home loans then the REPO rates will be something around 6.5%, and the additional 2-2.65% is the charges levied by the respective banks.

THE CONCLUSION-

after observing all these conclusions I personally suggest a person invest via diversification and towards uncorrelated assets, people make the mistake of investing in correlated assets a lot but you have to focus on uncorrelated assets.

no one can predict accurately what’s gonna happen next but we can definitely prepare for the uncertainty.

my duty as an investor is not to lose a lot of money rather than make a lot of money, I will be unique if I don’t lose any money in the recession, well if you ask me what’s gonna happen next I would say I don’t know- but I am prepared that is what I recommend you to do. ( my thinking after observing the debt to liquidity was very pessimistic but again after the reports of March and June I would have to say that it’s in a moderate position.)

And there is a bull run yet to come in the form of a correction ( yes its reversed).

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