First, wish y’all a great Diwali and a fabulous year ahead.

Last year, I posted on Diwali about the year ahead. And I was largely wrong. The index has reached a one year high, with a near 96%: it was definitely worthwhile to have invested in the index. The real estate market hasn’t crashed – apart from a few smaller towns. Mumbai and Delhi are rocking. India didn’t go into a recession in terms of negative GDP growth. The dollar is at 45, a little bit below 50 but it stayed at 50 for most of the year. I have not yet lost any meaningful amounts of weight.

Some of it might look like it came true – interest rates did fall, equities did look good sometime in the year, and some individual stocks gave their 100-200%. Pension funds did move in. Sure, some job losses happened. But this is all small stuff – I won’t sweat it and easily say I got it wrong.

But I’m not going to stop trying, because you never know what you do that makes you win a Nobel prize nowadays. So here’s the market stuff for next year.

  • Chinese real estate markets are going to tank. Sometime in the middle of 2010 perhaps, and coincide with a number of ARM resets in the US. This will somehow reveal why India and a lot of other countries are impacted by this, though no one has a clue just yet. I wish I could be specific, but I’m no soothsayer.
  • India’s going to have a real estate boom/bust cycle yet again. This is likely to be a really short one, largely because the last one didn’t get over properly. This time it’ll be the investors that hurt as much as the random retail buyer.
  • But commercial RE? That will take a hit all over India. We’ll finally see some real estate moves into smaller towns, and the bigger towns will take a hit.
  • Oil prices will slowly ease back after showing spiky behaviour. Some of this will be related to demand loosening, and yet others to regulation that disallows speculation in commodities.
  • Gold will continue to hit all time highs; there is likely to be a 10-20% drop in the year though, but it will roll back up.
  • Equities will see a lot of interest from organized funds like pensions, insurance and other long term saving schemes. That will provide a floor around the 3000 levels on the Nifty. We won’t see a new all time high in the broad indices (I’m going out on a limb on this one) and we will see a 30%+ drop in the year.
  • I will, as usual, attempt to do something more constructive in my life in terms of building a future for myself, giving more time to family, teaching my son to say “left” and “right” (instead of “yeft” and “yight” right now) and other items of similar importance, learning to write, taking a good long break, and finally, losing weight.

If nothing but the last one comes true, I will consider it a great year. Money is for living, not the other way around. Happy investing in the next year, folks.

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