The overall health of the world economy seems precarious at the best. The shift of economic strength from the developed economies to the developing economies is evident. Imprudence with which countries continue to print money and stimulate economies will lead to a weaker dollar in the long term. In such a scenario, Gold would be a good asset to have in your portfolio. Over the next few years, Gold should give one the best returns among all asset classes.Though equity markets have performed well in the last 12 months, they have moved into a period of volatility and range bound movements. Taking new equity positions currently would be wrought with risk, since the upward ceiling for growth would be a maximum 5% to 10% from current levels. Start now, it would be a good idea to exit equities on any new highs. For long term investors in developed market, exiting now would be a good option. Developing markets in three to four years would definitely be at higher levels than they are today.It is recommended that any cash be moved into money market instruments or fixed income instruments with low maturity.
Some of the sectors which will touch stratosphere in countries such as India are health care, education, and infrastructure. It would be a good play to enter health care and education with long term view. We expect private players to up the ante for these two sectors. The investment capital needed for the Health Care and Education would largely come from private players. The infrastructure sector has to be largely driven by government and would need huge infusion of capital. Though plans in India may be grandiose they may not materialize, due to would policy decision making.
Good luck with your investments.
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