India is on fund raising spree or is it vice versa , everyone in this world is keen to invest billion of dollars in India . Whichever way it is this is a good sign . India needs captial just like US needed it in 19th century and Japan needed it in 1950s and 1960s .
This capital along with human leverage can do wonders to Indian economy . So this will augurs well for Indian stock market but what are the long term risks
1) War risk are real : US enjoyed nearly decades of peace and even world wars and battle thereon were never fought on US soil . This is a big positive steroid for economy. India however does not have this benefits . It is circled by players who either not stable themselves or have expansionist dreams . India has been fortunate not to have BIG wars after 1971 . This has helped economy to grow and people to earn double digit returns from stock market.
2) Political Risk are real . Indian politicians have to manage recency factor on account of elections which happens every year in some form or the other. . Unless we synronise these events and say 2014 , 2019 etc are election years for National . State elections we will never get politicians to focus on developmental issues.
3) Liquidity and Capital Risk are real : India is capital starved country and if the capital flight begins and when that happens it's impact will be severe . India has got used to huge FII and FDI money that comes in through different means . Losing it will mean dramatic collapse of Stock markets
Does this we should not invest in stock market . Well the risk to not do it is even higher ... More on that in the next week
Successful investing is all about being crazy , different and less wrong than others . The ideas and process written here may not suit all risk profiles so please check with your financial "doctor" before adopting .
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