Yes, well done. Please do bet on the rupee appreciating against the dollar and see where that choice gets you in the next 12, 24, and 36 months, and in fact for any time frame you care to name. All the best.
Hyperinflation or not - the QE has increased Fred's balance sheet by 2x as of date (https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm) and it will continue to increase given the stimulus programs announced by the Biden Administration. If you see the money supply graph, it shows an exponential increase in money supply (from 2020 onwards and once you extrapolate for the proposed stimulus going into 2021/2).
Of course, the Fed believes it will control hyperinflation and it probably will too. But Greenspan was sanguine about the subprime mortgage market until the time he left office, which was shortly before that house of cards fell.
My point is simple: INR is more likely than not to appreciate against the USD. This has the potential to singlehandedly impact the return of a MF holding securities in USD. A lot of people getting into the US market forget that the FX gyrations can, all else being equal, kill the return. This is all the more the case because the INR has depreciated against the USD over the last 10 years - so the MOPE NASDAQ has given ~25% CAGR over 10 years and this is way way higher than the NASDAQ index it is tracking. This is only because of depreciating INR. I'm not sure if you invest but 25% CAGR over 10yrs is a crazy return - Nifty50 historical returns are around ~11%. That's way more than a 2.5x return over Nifty50 because compounding works exponentially.
Yes, because the Fed will just sit on its butt and let it get to that stage of hyper inflation...? Does 2% inflation on average over the medium term look like hyper inflation to you Wikipedia quoting self proclaimed laptop economists having a slow proof reading day?
Quantative easing leads to an increase in money supply and (potentially hyper) inflation. Both of those reduce the value of the currency vis a vis other currencies. This is a pretty well recognised impact of QE - whether the fiat currency will also follow the same path isn't absolutely clear.
Invest in Nifty50 low cost index funds (UTI is one example). Always buy "direct" schemes - never "regular" schemes. I use the Karvy KFin and CAMS apps to invest but I hear other apps also allow investment in "direct" schemes.
You can also invest in the index ETFs (they're a little cheaper than index MFs) but right now the ETF market isn't as developed in India and so there is a perceptible spread between the AUM and selling price. So, the cost difference isn't worth it IMO plus you'll have to open a demat account and invest yourself (as opposed to "set it and forget it" SIPs). I haven't checked the tax impact - so not sure if index ETFs are treated as equity mutual funds under the IT Act or if they're treated like all other MFs.
Motilal Oswal has got S&P500 index fund, if you want foreign exposure. I like this as a hedge against things going belly up in India - so I have invested in MOPE S&P500 MF. MOPE also has a NASDAQ fund IIRC. Just be cognisant that the return on any MF in foreign securities can almost entirely swing on FX rate change. There is a fear of significant inflation in the US right now due to the monstrously massive QE being undertaken by the Fed. If there is significant inflation, the INR will get stronger against the USD - thereby eroding the return. Right now, we are at almost all time high INR:USD exchange rate - if we return to 45:1 then that alone will crush your return.
Parag Parikh is also a good fund. But do you believe in value investing? Because that fund is the only pure play value investing fund in India.
Unless you understand the philosophy of value investing or any other investment philosophy, I would suggest stay away from all but index funds. With index funds, you're betting on the Indian economy getting bigger and more efficient - only invest if you agree with this.
You honestly don't need to go to an advisor for basic or advance personal finance. All it needs is to have metacognition (knowing what you know and knowing what you don't or can't know) and taking out about 20-40 hours of your time. Don't have the "I don't understand this stuff" mentality - it is simple.
I am pleasantly surprised by the number of folks in the lawyer community who are interested in this!! Tempted to start a dedicated blog/podcast/youtube channel on this.
All the best.
Of course, the Fed believes it will control hyperinflation and it probably will too. But Greenspan was sanguine about the subprime mortgage market until the time he left office, which was shortly before that house of cards fell.
My point is simple: INR is more likely than not to appreciate against the USD. This has the potential to singlehandedly impact the return of a MF holding securities in USD. A lot of people getting into the US market forget that the FX gyrations can, all else being equal, kill the return. This is all the more the case because the INR has depreciated against the USD over the last 10 years - so the MOPE NASDAQ has given ~25% CAGR over 10 years and this is way way higher than the NASDAQ index it is tracking. This is only because of depreciating INR. I'm not sure if you invest but 25% CAGR over 10yrs is a crazy return - Nifty50 historical returns are around ~11%. That's way more than a 2.5x return over Nifty50 because compounding works exponentially.
You can also invest in the index ETFs (they're a little cheaper than index MFs) but right now the ETF market isn't as developed in India and so there is a perceptible spread between the AUM and selling price. So, the cost difference isn't worth it IMO plus you'll have to open a demat account and invest yourself (as opposed to "set it and forget it" SIPs). I haven't checked the tax impact - so not sure if index ETFs are treated as equity mutual funds under the IT Act or if they're treated like all other MFs.
Motilal Oswal has got S&P500 index fund, if you want foreign exposure. I like this as a hedge against things going belly up in India - so I have invested in MOPE S&P500 MF. MOPE also has a NASDAQ fund IIRC. Just be cognisant that the return on any MF in foreign securities can almost entirely swing on FX rate change. There is a fear of significant inflation in the US right now due to the monstrously massive QE being undertaken by the Fed. If there is significant inflation, the INR will get stronger against the USD - thereby eroding the return. Right now, we are at almost all time high INR:USD exchange rate - if we return to 45:1 then that alone will crush your return.
Parag Parikh is also a good fund. But do you believe in value investing? Because that fund is the only pure play value investing fund in India.
Unless you understand the philosophy of value investing or any other investment philosophy, I would suggest stay away from all but index funds. With index funds, you're betting on the Indian economy getting bigger and more efficient - only invest if you agree with this.
You honestly don't need to go to an advisor for basic or advance personal finance. All it needs is to have metacognition (knowing what you know and knowing what you don't or can't know) and taking out about 20-40 hours of your time. Don't have the "I don't understand this stuff" mentality - it is simple.
This is a good starting resource: https://www.reddit.com/r/IndiaInvestments/comments/9ltgni/for_someone_who_is_absolutely_at_level_zero_in/?utm_medium=android_app&utm_source=share