Post-Covid – India, Changes in Investing and Economic trends?
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The savings rate will go up; India saw unforeseen medical expenses, millions of jobs lost. In a country with ~ 2000$ per capita income and an inability to give monetary handouts – Savings have to go up.
Channelizing those savings; A hopeful realization that Financial assets > Physical assets. While this year has been an outlier – it’s pretty clear that the only asset class that can give long-term double-digit returns are ~ equities.
Real yields on FDs are ~ zero right now.
Consumption trends, Short term trends – Folks would rather save up for a third wave than spend on maybe a new car. Discretionary consumption could be hit. Long-term – Story still intact. With the average age of an Indian ~ 28, major expenses are yet to happen
Income inequality; The sad truth. It always existed and Covid has exacerbated it. ~ 100 million people forced into poverty this year. Rich will get richer. Interestingly a trend being mirrored in stocks too. Strong getting stronger at the cost of others. Feel free to add other trends you have observed.
