Why this is a good time to invest in Equity
Inflation is at its lowest since 2012. Usually, people spend more when inflation is low. This helps companies make profits and the economy to grow.
Lower interest rates
When inflation is low, the Reserve Bank of India (RBI) usually cuts interest rates to help the economy grow. This, too, encourages people to spend money.
Wider profit margins
When costs are low (due to low inflation) and people spend more, companies tend to make more profit. This can be measured by widening profit margins. Secondly, when companies sell more, they can cut costs by producing in bulk. This, too, helps widen profit margins.
Stock markets rise when corporate profits grow. In the next few years, experts foresee profits and the economy to recover.
Improving Current Account Deficit (CAD)
India’s CAD is low today. This means India owes less money to the world. This helps shield the economy from negative global factors.
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