Kirttan Shah@KirtanShahCFP
Global investing may look super cool right now because of the last 1-2 years of returns but here’s something most of you’ll should know,
(1) In the last 1 year, return of
- S. Korea - 80%
- Latin America - 45%
- US, China, Japan, Europe - 20-40%
- India generated only 5%
So suddenly there is a fomo in the market of being left out and people wanting to invest globally
(2) let’s zoom out, In the last 5 years in $ terms,
- Only Germany, Taiwan & US has done better than India.
- Infact, inspite of 80% returns last year, South Korea 5 year return is 2.1%, inspite of 25% returns in the last year Chinas 5 years returns is 1.3%, Japan is 3.9%, infact MSCI EM index is 1.7% vs Nifty at 8.7%
(3) In the last 10 years, only US has done better than India. Infact India is at 8.4% and China is at 4.4% returns just for context
(4) Since Nifty started trading, nifty has generated 11.75% dollar returns vs S&P 500 at 8.5%
Now some will give you gyan around rupee depreciation and hence you should invest globally BUT if you have gold in your portfolio that also benefits from rupee depreciation. 25% of Golds total returns are because of rupee depreciation.
I am not even touching on the operational difficulties in global investing.
Yes India was expensive and global was cheap & so the last 1-1.5 years dint do well for India but it’s normal & nothing new. Happens every 2-3 years, check the attached data by HDFC AMC.
Macro, Tech, Sectors, Trends have also changed and been difficult in the past for India but still the above numbers were delivered by India. I see no reason why this time it’s any different for the fastest growing economy in the world.
While having 10-15% globally is absolutely fine as an India domestic investor for diversification but don’t get soaked in the narrative because of recent returns.
Keep your investing simple!
