Going globalFind out if it’s a good idea to invest in the global market
There was a time in our lives when the choices were limited and opportunities were few. My hometown used to have two or three schools, and their students felt proud to don their uniforms. Ambassadors or Fiats were the only private cars to own, Lifebuoy or Lux to wash our dirt, and Thumps Up or Limca to quench our thirst. If you had a relative living in a foreign land, you would perhaps get to use Camay soap and Pantene shampoo, whenever they visit India.
For you to understand this, you must be in your 40s and above. And by no means do I want you to brood over your age, but rather enjoy the changes you have seen. Now we have German auto giants opening showrooms in my hometown. You can order an Italian pizza over the phone. Wear GAP T-shirts, bought locally. The gap between the metros and the smaller cities has narrowed. And with the advent of the internet and the way we are using it, our lives have changed.
I have always been advocating that a portion of your investment should be in equity. Equity means owning a part of a business. When people ask me which business they should be a part of, the most simple answer is:the business which you yourself are a customer of. If you like a particular brand of coffee or T-shirt, you are not the only one. There are probably thousands of people who also like the things you like. That’s because, as consumers, when we choose a product or service, we tend to choose it for the price we are paying and the value we are getting. And if you carefully see, there are only a few winners across different sectors, and they are the best equities for your investments.
Since we are increasingly using global products, the question naturally arises : Can we invest in Global equity ? The answer is yes, we can. In fact, almost all major Asset Management Companies have global funds and they are predominately focused in the US market. And looking at the statistics, about 0.4 per cent of our total assets in mutual funds are invested in global markets. (To be contd)