FDI is recognised an important driver for economic growth and made Sensex kiss 20000 (approx) in a short duration. But this is what is worrying me unless and until the government & corporates utilize these funds in safe bets or ventures the economy is safe.
Now FDI has invested with some lock in period and the true number of yrs for lock in period is never disclosed as per policies. Why does any investor has lock in period the answer is he can redeem his investment and profits (interest earned) after few years, in short they are here to invest and withdraw their stake at the later stage when they need them back.
When the demand for services and goods manufactured in India reaches a saturation point the demand falls gradually. The fall is identified by large industries and they gradually reduce the production decrease the stakes. This is the point where I see Sensex at 26000 - 27000 few yrs from now and rupee appreciates at Rs. 41 /- (approx) against $ (this is demand for $).
Now the panic starts spreading amongst medium, small producers, investors, creditors and so they start liquidating suddenly demand of rupees is seen in the market every stakeholder at this juncture is liquidating which pulls Sensex down.
All this brings recession along, people are jobless, no demand seen in market.
Then FII's (Foreign institutional investors) start investing in the economy create demand and pull the country out of recession suddenly demand of $ arises rupee depreciates and the figure of Rs. 49 /- (approx) is seen again.
China with its real estate bubble should lead to recession some time in 2015-2016. The rate at which it has grown since few years shall find hardly any nation to bailout.
Be prepare for the recession in 2015-2016 dont worry that is the correct time to invest in socks since they would be cheaply available and expected returns are 500% over later few yrs.
Golden rule says "Buy cheap & Sell high"
Njoy making money.
KHP
makin love with eco & fin inv
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