The Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) is all set to form the government for another five years and with a bigger mandate this time. In last five years we saw lot of policies, reforms and Acts that were implemented, but they are yet to make an impact and with NDA getting another five years experts believe that these reforms will bear fruit under NDA-2. We asked the experts how the NDA coming back in power will impact individual investment and what an investor should do?
“BJP government announced a lot of benefits in the interim budget like rebate on income up to ₹5 lakh, so all these will now go through," said Rohit Shah, founder and chief executive officer, GettingYouRich, a financial planning firm.
"Besides that, for last one year or so most institutional investors, PE firms and foreign investors, were holding on their investment decisions, they will now be able to go ahead with their plans, this will infuse fresh investment in the market," he added. However, given the current economic condition and high valuation of stocks, investors should remain cautious. "Selective opportunities may appear, but ideally one should stick to his SIP’s and portfolio mix," suggested Shah.
A day after the exit polls that gave the BJP led NDA a clear mandate, Sensex surged by 1,400 points, however most experts believe that this is a short-term phenomenon; in long run market will stick to basics. “Market is little over rated as of now, after one or two weeks focus will again shift to global factors like crude oil, currency and international markets," said Varun Girilal, co-founder and executive director, Mitraz Investment Advisors, a financial planning firm.
"At present, it is a good time to book profit mostly in large-caps as this segment has had a good run in last one year. Some small caps can be considered for investments but should be in line with portfolio," said Girilal.
Overall most experts suggest that no major change in portfolio is required, one should continue with their SIPs and should refrain themselves from taking undue risks.