Posted On Friday, Nov 04, 2016
There is a famous saying which goes - 'When the US Sneezes, the World catches a cold'. No one can deny the fact that the US; despite Lehman, 9/11 and all the other crises that have plagued it over the years, remains the only superpower. Once in every four years when the US elects its President - the world's eyes are upon that election. Who will America vote for? Who will be the most powerful man (or a woman this time...who knows!) on earth? Naturally, an event like this is most likely to drive global stock markets.
This time, the Presidential election involves two candidates, who, to put it mildly, have their own issues in terms of credibility, and it seems more likely that one will lose the election rather than winning it. i.e. to ensure that a Candidate A doesn't come into power, Candidate B will be voted for, rather than Candidate B being strong enough to pull votes on his/her own. So, come the 8th of November (US time), Americans will cast their votes and chose their 45 th President.
The US election has the capacity to change the tone of global economy and markets. The economy will react gradually depending upon the policies of who occupies the White House. However, stock markets across the world, including India, would react immediately to any kind of news. The impact, however, is likely to be fairly short-term.
Over the long term, the India growth story remains intact. India is one of the fastest growing economies in the world, and whoever sits in the oval office at the White House cannot ignore India in their political plans.
So, what should be your plan of action? To book profits and pull out your investments or stay invested and wait for the euphoria or despair (depending on who wins) to die down?
At Quantum, we have always urged investors to stay invested for the long term. As a disciplined investor, one needs to understand that ignoring short-term market volatility is the right way to go. It is very important for us to watch out for the long-term impact of any event. For now, we cannot predict the extent of positive or negative impact that the US elections will have on the Indian markets; however, we remain optimistic on the India growth story.
No matter who wins or loses the presidential elections, we want you to be a winner when it comes to achieving your financial goals. Therefore, stay firm and remain invested until you achieve your financial goals.
Disclaimer, Statutory Details & Risk Factors:
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