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International markets are cheap. Is it an attractive investment opportunity?

Let's go through some mind-blowing facts before we analyze where to invest in the current scenario -


1. Germany has entered a recession, USA and countries across Europe are very close to one.



2. Many small banks in US have high exposure to Commercial Real Estate, many of which are remaining vacant.

  • No rent is being paid on 1/5th of US Office space

  • Small banks in US hold 70% of commercial real estate loan

And hence, there is a looming risk of US banks falling in great trouble.


3. Amidst all this, this is happening in India -

  • Real estate new unit sale at a 8 year high

  • FY23 Real GDP grew at 7.2% (vs. negative GDP growth in US, European countries)

  • Indian banks are in a very good state - with very low bad loans rate, and good growth


4. Indian Stock Markets Valuation


Conclusion:

International Markets -

Valuation: Cheap/ Reasonable

Fundamentals: At the brisk of a (mild) recession

What Should you do: Instead of catching a falling knife, it is better for things to improve fundamentally and then begin investing there.


Indian Markets -

Valuation: Reasonable

Fundamentals: Strong and growing at a very healthy pace



We recommend investing in Indian markets [via SIP and (or) lumpsum] rather than International markets in the current scenario. If you're still keen, you can allocate 10-15% of your corpus to international markets, gradually (not at once), to benefit from the next 6 months expected volatility.



If we can help you invest, reach us on -

Whatsapp: +91-91110-06340




Data Source: Kotak MF, Bloomberg, Motilal Oswal, Eurostat




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