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Bandhan Mutual Fund Equity Outlook 2024

In @Bandhanmutual’s Equity Outlook 2024, titled “A Tale of Three Probables,” we explore how historical cycles might offer insights into our current high inflation and interest rate scenario. 

 

A quick look at the key takeaways from the report. But before that, 

 

Just in case you missed it, check out @Kuvera_In’s insights from investors –  India Rising | 2023 Review and 2024 Outlook.

 

Download: https://kuvera.in/IndiaRising_2024Outlook

 

 

Cycle I – The 1994-95 Soft Landing: The Fed took action, inflation was tamed, and the economy sailed smoothly. ⛵ GDP growth stayed healthy, and the dollar weakened. 

 

Cycle II – The 1973-79 Inflation Strikes Back: High GDP growth led to soaring inflation. The Fed fought back with high-interest rates, and the dollar was weak. 

 

Cycle III – The 1945-50 Debt Deleveraging: Post-WWII, high inflation met government debt. The Fed kept rates low to stimulate growth. 

 

 

@bandhanmutual report says that 2024 might echo the 1994-95 cycle: 

 

??US inflation fell from 9% to 3%

??Fed hiked rates, but strong GDP & low unemployment persisted

??If real rates stay high, US economy may slow, with falling rates

??Neutral outlook with global headwinds, equity tailwinds

 

1970s-style inflation resurgence is unlikely, but not impossible. 

 

??Fed might cut rates due to high government debt-GDP, boosting equities, economy, and valuations.

 

??Inflation resurgence unlikely, credit risk reduced.

 

??Emerging markets could outperform as developed markets see falling rates. 

 

Option 3: Tail risk of tightening causing a credit event or recession. The odds are lower now, but still, a concern. ?

 

? On the global stage, emerging markets might outshine developed markets as interest rates in the latter fall. 

 

?? India Shines: Domestically, India’s looking bright with strong demographics, political stability, and reforms paying off. 

 

@bandhanmutual report suggests, while high returns may not continue for the broader market, small and midcaps still deserve a spot in your long-term equity portfolio.? 

 

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Interested in how we think about the markets?

Read more: Zen And The Art Of Investing

Watch here: Investing through various economic and market cycles

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