MBIPL

Understanding Impact of Bond Yield Differential on Equities

Education
MBIPL Updated   
TVC:IN10Y   India Government Bonds 10 YR Yield
Over the past decade the interest rate differential between US and India has been constantly going down. This has largely been due to stronger fiscal position of India and also gradual weakening of US Public Finances.

This has led to the Rupee becoming more stable against the Greenback, thereby reducing the rate of inflation in India.

Further, this has resulted in rising of equity markets over the last decade, and more importantly, the same setup is likely to stay or become better over the next two decades.

Hence long term retail investors in India can benefit from this by placing algo based orders to buy Index ETFs on dips and reduce their cost of buying and stay invested over the long term thereby getting benefit of power of compounding.
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Video idea after US Fed Rate decision. The new video takes the discusion of the previous video forward.

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