Corporate earnings are likely to disappoint this quarter and this could drag markets lower. This is largely because of the de-monetization impact on many companies, especially companies from the FMCG and the consumer goods space. Many banking companies could also see their non performing assets worsen as a result.
The pain may last for a few quarters and investors would be eager to see how the quarterly results pan out.
If you are looking to invest in January 2017, you maybe disappointed as there could be some paid ahead. What we suggest is look for companies that can be relatively risk proof in the demonetization era. Classic examples would be housing finance companies and companies like Coal India which pay solid dividends to their shareholders.
In fact, you should go ahead and buy the stocks of these companies as they are risk proof.
In terms of other companies, it is going to be a difficult few quarters. If you are a long term investor it makes sense to buy into quality companies on declines.