It's the era of high-interest fixed income investments

It is not wrong to say that the allure of equity will continue or that equity in emerging markets will remain attractive, or even that commodities are good investments. However, today's market conditions are a bit different, and I would like to present some facts so that investors in equity and commodities can take solid steps to balance their investment portfolios without delay. It will take at least 15-20 years for the debt burden of many countries to come down to a normal level. It is well known that harsh measures to reduce deficits can lead to socio-political crises in countries like Greece and Spain. Central banks have limited options to reduce these deficits. Household debt makes up a small portion of the total debt
The financials of companies and industries are directly linked to the debt levels of economies, and any kind of deleveraging without an increase in productivity can reduce GDP. There are also limited possibilities of printing more currency, as the debt crisis of 2007-08 suggests. Given these realities, investors should ideally move forward in the following ways: High-quality fixed income will be preferred among all types of investors. Investors will first look at the sovereign level considering currency risk and leverage ratios and then invest in corporate bonds. Continuous rallies in stocks or commodities will become a thing of the past. Investment decisions in equity and commodities for the long term will have to be made wisely.Now, let's talk about investors who invest in Indian markets. Such investors should take the following steps for their financial assets:
1) Investors should identify options in short-term or medium-term liquid fixed income funds, or knowledgeable investors can invest in company bonds for stable returns. All investments must be liquid because investors do not want to remain tied to a single investment. It is good for NRIs and foreign investors to hedge currency risk. Arbitrage benefits will remain even with hedging.
2) Interest rates in India will gradually decrease, and as a result, the yields of these investors will increase along with capital appreciation.
3)Equity investments need to be made cautiously, not based on traditional principles. The shine of gold will also diminish over time, and any speculative commodity investments should be made with careful consideration.
4) As for exporters, rupee depreciation will increase their competitiveness. However, if inflationary pressure does not decrease and high-interest rates persist, competitiveness might not be observed. Thus, deleveraging of business operations will become a necessity.
5) If oil prices remain low for a certain period due to a lack of speculative buying, the Indian currency will strengthen, and this could lead to a rally in Indian stock markets.