Election season is on and political war at its peak. Political parties are trying to woo voters in their own way. We are really confused – whether to choose Congress or BJP or AAP and then there are regional parties as well. Whatever be the outcome, we want a government which can take decisions that work well in the interest of our country. Politics have a lot do with investments as one wrong decision can have a huge impact on our financial well-being.
Here we will try to understand how investments strategies are related to politics. These are our personal views on political parties.
The Congress Strategy
Don’t make people richer, exploit them by way of higher inflation, high corruption etc. Instead of talking about natural way of growth where competition should exist, they believe in populist measures like guaranteed food, guaranteed employment, free laptops, free medicines, free education and what not. But guarantee comes with a huge cost. India is a resourceful country but even after completing 65 years of independence Indians are still struggling for basic amenities.
Guaranteed investments work on the same lines as congress does. Guaranteed investments would definitely give you what has been guaranteed but think about it do the guaranteed returns keep pace with the rising inflation. Can you buy the same quantity of goods and services with those guaranteed returns which you used to buy 5 years back???? The answer is NO. This is the reason; that despite Indians are good savers, they are still poor. Guaranteed investments never make investors rich.
The BJP Strategy
Gujarat is a wonderful example of prosperity and growth in India. Narendra Modi, Chief Minister of Gujarat and also the prime ministerial candidate of BJP talks of creating employment, inclusive growth, healthy competition for the coming Lok Sabha elections etc. The election campaign of BJP for 2014 elections is “To build a vibrant India”.
Such is the case with equity investments. BJP’s election strategies resemble investing in equities. Equities flourish when there is a growth and offers real long term benefit. Narendra Modi has clearly spelled out through Gujarat that with due time and committed efforts towards a goal you can achieve anything. Similar is the case with equities if given due time they outperform all the other financial assets. For long term financial goals one should adore equities.
Aam Aadmi party is the new kid in the block which is advertising weaknesses of other political parties. Similarly, with the advent of any new product in the market, other products are portrayed as a waste. But remember just like Aam Aadmi Party, the new product is yet to prove itself. One should not just go overboard with the new product and invest all their money in it. If you really find it good and understand it’s need within your portfolio, may be you can allocate funds towards it.
With so many options for a good leader and investments; it’s difficult to decide which one is better. While choosing a good leader for the nation, we seek assurance of good governance, growth and fruitful decision maker. While making choice of investments we seek a product that assures effective management of our funds and growth from time to time. Hence politics and investing are no different.
It’s the right strategies combined with right set of people which will work well for both politics and our investments.