[Must Read] Markets will Correct 📉

• Central Banks have almost achieved their objective of controlling inflation through tightened monetary policy. Though the CPI is inching lower, asset inflation is resurfacing through stock prices and real estate.
• Many listed companies that came out with the quarterly numbers are nothing good to talk about. Growth and profits are subdued and for small and mid caps the numbers are decimated but the stocks are still trading at a historical premium.
• Analysts will once again start downgrading the earnings forecast and that will start the downward momentum. Once again people will undergo the "Flight to Quality" effect.
• No of Bankruptcies is steadily increasing
• No of Job openings are trending lower
• Most of the US listed firms that have borrowed at a lower interest rate in 2021 are coming up for renewals this year. By the time they refinance, they will be doing it at a higher interest rate which will impact their PAT as a result their EPS estimates will take a biting.
• Gold looks attractive from a market cycle standpoint.

My Recommendation:

• Have an emergency fund for at least 6 to 9 months to cover your expenses.
• Exit overvalued small and microcaps stocks. Move to a reasonably valued large cap.
• Have health insurance for you and your dependents.
• Move out of small cap mutual funds and have some allocation to debt funds.

Let me know your thoughts.

I hope 2025 turns out better.