Outlook for the Future of Stocks in India | Stocks - Personal Finance

As the Murphy's Law says, "anything that can go wrong will go wrong". India is no exception to this rule when it comes to inflation, growth, depreciating currency and rising interest rates. India also suffers from inaction by the legislative powers held by politicians. So there's alround poor performance of stocks and equity market in India.

Cold, freezing winds from the overseas markets, fuelled by debt crisis in Europe also triggered bad performance of the Indian Stock Markets.

In today's pain lies tomorrow's gain. That's the hope that we live with today.

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Corporate profitability is likely to remain depressed in the near future given the higher input cost, rising interest rates, rupee depreciation and higher competition.

The Economy cannot afford continuance of inflation, rising interest rates and weak currency.

We live in the hope of softened interest rates and reversal of the currency slide.

For investors, as we said earlier, today's pains can give tomorrow's gains. This could be an opportunity for investors to participate in the long term India story.

In this scenario, investors can focus on stock picking with critical review of the firm's management quality, cash flows, cash utilization and their agility in timing and allocating funds.

Investors can look for businesses with strong franchise value, large markets, profitability margins.

The use of asset allocation principles and using the downturn in equity market to balance your asset allocation can be a timeless principle to follow.

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