I am fairly pessimistic on future prospects. Time to keep booking profits and ploughing into liquid funds - I am practicing what I am preaching.
If you were 60/40 in favour of stocks, time to rebalance to 50/50. I am still 60/40 (down from 70/30).
I am pessimistic on FMCG, Auto, Banking and NBFC/Housing finance.
Pharma and infrastructure should hold up better. Also dividend yield funds. I am buying in these sectors.
Re: US quantitative easing, it will reverse with a bang when long term yields fall to ridiculous levels (currently ~ 2.5% and falling) - and people start dumping US bonds (currently in a bubble). There will be a sudden and drastic rise in US yields, dollar index will rise, g-old will fall, rupee will fall, rupee g=old will rise or stay same (depends on just how much dollar g-old will fall)
FII money will stay for a while, and then withdraw to safer US yields of around 4%. Depending on extent of outflow, Rupee depreciation will be drastic.
I expect 55 to the dollar within 1 year.
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