CHAPTER 4 : Adding 'Stability' to the Portfolio in Uncertain Times
In the past few months, BSE SENSEX after reaching a lifetime high of 62,245, witnessed a sharp correction. The fall in the index was not purely led by an increase in the new covid-19 variant ‘Omicron’. Omicron cases started rising exponentially after the last week of Dec 21, on the contrary, BSE SENSEX crossed 60,000 marks in the same period. There was hardly any correlation between Omicron's concern and Market movement. Along with the Omicron, there is one more risk market is facing right now which is a 'Rate Hike' by the Central Bank. To boost economic activities, Central Banks all over the world lowered the interest rates or used the fiscal stimulus to pump in more money into the system. But as expected this huge money supply has fueled inflation. To curb this, Central Banks will start increasing rates. The real trouble is, despite the omicron threat and rate revision risk, markets have continued to move upwards with much uncertainty in near future. Apart from these two