5 Assets (I'm buying) in this market fall | Macro Analysis | Akshat Shrivastava

Summary

In this video, the speaker analyzes the economic outlook for 2025, focusing on the likelihood of moderate to high inflation and its impact on various investments. Key asset classes like unlisted stocks, value stocks, rent-generating real estate, and gold are highlighted as promising opportunities in a high inflation environment. Additionally, the speaker emphasizes the importance of career advancement through AI upskilling, offering a free training program for the first 1,000 viewers. The video provides valuable insights for investors and professionals looking to adapt to evolving economic conditions.

Takeaways

• 😀 Inflation in 2025 is expected to be moderate to high due to lower-than-expected growth rates and central banks' decisions to maintain interest rates.
• 😀 Unlisted stocks, particularly in mature companies before their IPOs, present a strong investment opportunity in 2025.
• 😀 Value stocks are likely to outperform growth stocks in an inflationary environment, as they have lower P/E ratios and can offer better returns.
• 😀 Rent-generating real estate is a promising investment in 2025, as property demand and rental yields are expected to increase due to inflation.
• 😀 Gold will likely perform well as a hedge against inflation and government debt, as more countries are increasing their gold reserves.
• 😀 The government's challenge in balancing inflation and growth means interest rates will not decrease significantly, limiting rapid economic growth.
• 😀 The unlisted stock market offers opportunities in companies that are undervalued before they go public, where valuation risks are lower.
• 😀 Mid-cap and small-cap stocks are less attractive at the moment due to market consolidation, with more stable large-cap stocks being favored for 2025.
• 😀 Real estate investments, particularly in luxury and rent-generating properties, will be more in demand due to high inflation and tax changes affecting property transactions.
• 😀 Large-cap companies with strong fundamentals, like private banks and FMCG firms, are expected to perform better in 2025 compared to smaller companies.

Q & A

Why is 2025 likely to see moderate to high inflation?

2025 is expected to see moderate to high inflation primarily due to the macroeconomic factors at play, such as India’s lower-than-expected GDP growth of 5.4%, the RBI’s decision to not cut interest rates, and global factors including the US Federal Reserve’s cautious stance on further rate cuts. Governments are balancing growth with inflation control, which is leading to inflationary pressures.

How does high inflation impact investment opportunities?

High inflation affects different asset classes in varying ways. For example, high inflation can drive up stock valuations, especially in unlisted stocks, and increase the price of rent-generating real estate. It may also influence the performance of commodities like gold, with investors seeking safe havens. However, inflation can hurt growth stocks as they may experience a valuation correction.

What role does artificial intelligence play in career growth, as mentioned in the video?

Artificial intelligence (AI) is highlighted as a key skill for career growth in the coming years. By learning AI, individuals can enhance their productivity, job-hunting prospects, and salary growth. The video promotes an AI training workshop that helps participants master AI tools, improve business strategies, and build their personal brand.

Why is the RBI hesitant to cut interest rates despite the lower GDP growth in India?

The RBI is hesitant to cut interest rates due to concerns over rising food inflation. Lowering rates could stimulate growth, but it would likely exacerbate inflation, especially in critical sectors like food. The RBI is focused on managing inflation rather than accelerating growth at the cost of higher prices.

What are 'unlisted stocks' and why is the speaker bullish on them for 2025?

Unlisted stocks are shares in companies that have not yet gone public through an IPO. These stocks are generally priced lower due to the uncertainty of the company’s future performance. The speaker is bullish on unlisted stocks because, in a high inflation environment, some mature companies may have undervalued equities, which can appreciate significantly once they go public.

What is the difference between 'growth stocks' and 'value stocks'?

Growth stocks are companies expected to grow at an above-average rate, often with high P/E ratios. These stocks are more volatile and may face valuation corrections in a high inflation environment. Value stocks, on the other hand, are priced below their intrinsic value, often with lower P/E ratios. They tend to be more stable and can offer solid returns during inflationary periods.

How does rent-generating real estate perform in a high inflation environment?

In a high inflation environment, rent-generating real estate tends to appreciate in value. This is because inflation drives up property values, especially in markets with strong demand. Furthermore, the removal of indexation benefits from real estate taxation could increase demand for rental properties, making them attractive investments.

Why does the speaker recommend investing in real estate despite some negative opinions about the market?

The speaker recommends real estate investments, particularly rent-generating properties, because they tend to perform well during inflationary periods. The Indian real estate market, especially in luxury segments, may face challenges, but rent-generating properties are expected to see increased demand and higher prices, particularly in cities like Mumbai, Delhi, and Bangalore.

What impact does the removal of indexation benefits have on real estate investments?

The removal of indexation benefits means that investors can no longer adjust the cost of their property for inflation when calculating capital gains tax. This makes long-term buy-and-hold strategies less advantageous, but the demand for rent-generating properties is expected to increase as investors look for assets with stable returns.

What is the speaker's view on midcap and small cap stocks for 2025?

The speaker is not very bullish on midcap and small cap stocks in 2025, as these stocks have been consolidating and may face sideways movement. In contrast, large-cap stocks, particularly in sectors like banking and consumer goods, are expected to perform better. The speaker recommends focusing on value stocks rather than growth stocks in the current market environment.