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Here's Why You Should Buy Stocks Ahead of Elections


The recent global sell-off has almost done away with the gains made in the year 2018, further the fall in US stock markets is likely to create a rub-off effect on emerging market equities. And as per experts, it is the best time, to dig out the right price and buy into the blup chips such as Maruti etc.

Here's Why You Should Buy Stocks Ahead of Elections

At the current levels, markets are offering reasonable valuations and furthermore given the macro outlook when crude oil prices are cooling off to $75 per barrel and there is seen some 15% huge correction and further more corporate earnings are reasonably good despite the higher cost and rupee volatility, investors in stock market should not altogether be pessimistic about stock.

There is uncertainty among market participants and experts with the assembly elections being just six months away. Nonetheless, historical data suggest that after a year or so post-elections, equity markets have fared to provide good returns to investors. After the last 5 elections, it is important to highlight that indices generated positive return for its investors in the short to medium term.

Factors that showcase a positive outlook for markets in the medium to short term

Attractive valuations

Substantial inflow into the equities

Improving micro climate with recovery in rupee quiet imminent

Stable macro with crude oil prices receding from record highs

Indian economy at its resilient stage

It is to be noted that after the Lehman crisis hit the world markets in 2008, equity markets took a big hit and with general elections in 2009, managed to return investors a return to the tune of 81%. Nonetheless, with a similar crisis hitting Indian shores due to the IL&FS liquidity crisis we can equities at the current correction level, risk-return ratio to be handsome for long-term investors.

Read more about: general elections stock markets
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