Please find below the 5 charts that tell interesting stories on Markets and Investing.

 

1) Is Stock Market Expensive right now for Investment?:

 

1) US and Emerging Markets are close to fair valuation
2) Japan, China and Europe are relatively cheaper.
3) Equity markets are not in bubble mode and have good scope for rally from here. 

 

Good time to be invested in Equity.

 

*Source – JP Morgan

 

2) Correlation between Indian GDP and Corporate Earnings Growth:

 

1) Correlation is not very high
2) In 2003-2008, earnings grew at 2X of GDP
3) In 2009-2020, earnings grew at 0.4X of GDP
4) In 2021-2023, earnings grew at 3X of GDP

Jump in earnings come in phases. PE Ratio may not always give right valuation. Discounting of future earnings become important.

*Source – Motilal Oswal

 

3) Inflation is coming down globally and will continue to fall in the coming months.:

 

Inflation has been a big pain for the last 2 years which took a heavy toll on global markets.

 

Finally, inflation is coming down and now we are getting worried about low inflation.

 

The cycle keeps repeating and keeps throwing investment opportunities. 

 

 

4) Will the dominance of US & US Dollar continue?

 

Historically, the country which has dominated innovation has dominated the world.

 

Out of the Top 50 innovative companies, US is home to 25 companies. So, US dominance is expected to continue in future.

 

China is growing stronger with 8 most innovative companies.

 

Tata is the only Indian company in the list. India needs to invest more in innovation and R&D. 

 

 

 

5) Indians are not participating enough in the great wealth creation story:

 

In India, equities only account for an estimated 4.7% of total household assets of US$11.1 trillion at the end of March 2023.

 

This is far low when compared to 36% for US.

 

Clearly, Indians needs to invest more in Equities to participate in the great wealth creation story of India.

 

Read more similar articles in our blog – https://alphacapital.in/blog/

 

Best Regards

 

 

Dr. Mukesh Jindal CFA, CFP, CAIA, Ph.D.

 

Alpha Research