- Trivesh D., COO at Tradejini, shares his insights on the potential impact of the 2024 general election on the stock market.
- He suggests that while the short-term impact may be minimal, the long-term effects could be significant.
- Trivesh also discusses the sectors he is bullish on and why retail investors should consider investing in bonds.
Trivesh D., COO at Tradejini, discusses the potential impact of the 2024 general election on the stock market and shares investment advice for retail investors.
Impact of 2024 General Election on Stock Market
The results of the 2024 general election are unlikely to greatly influence the stock market in the short run, according to Trivesh D., COO at Tradejini. However, he suggests that the long-term impact could be significant. The recent bull market has largely been driven by confidence that the incumbent party will remain in power, along with the phenomenon of election rallies. Election years are usually good for financial markets, with the past four general elections showing double-digit returns. However, if the election outcome is unexpected, it could cause market disruptions, as seen in previous instances. These are likely to be short-lived, with recovery expected once the election fever is erased and normalcy is resumed.
Potential Market Correction and Future Investment Sectors
Trivesh also discusses the possibility of a market correction exceeding 5 per cent, which he believes is unlikely given the resilience displayed by the Indian markets thus far. He highlights high valuations in small and mid-cap stocks, which are susceptible to a sudden correction. Looking ahead, Trivesh suggests that industries such as pharmaceuticals, electronics manufacturing, and infrastructure are anticipated to see robust growth. He also sees potential in the electric vehicle (EV) market and renewable energy and recycling sectors.
Investing in Bonds and Ideal Asset Allocation
Trivesh advises retail investors to consider investing in bonds, which provide stability and income within a diversified portfolio. He believes a strategic mix of equities and bonds is ideal for long-term wealth building. In terms of asset allocation, Trivesh recommends a multi-asset approach, dividing your investable corpus across asset classes like equity (stocks), gold, fixed income (bonds), and real estate. The ideal allocation depends on your risk tolerance, investment horizon, and financial goals.
Conclusion
In conclusion, while the 2024 general election may not greatly influence the stock market in the short run, the long-term impact could be significant. Retail investors are advised to consider investing in bonds and to adopt a multi-asset approach to asset allocation. Sectors such as pharmaceuticals, electronics manufacturing, infrastructure, EVs, and renewable energy are expected to see robust growth in the coming years.
