Emerging Giants Newsletter – May, 2018

After a weak first quarter, Indian equity markets rebounded sharply in April 2018 with the Nifty rising 6.2% for the month. These periodic ups and downs only serve as reminders that volatility is an integral part of equity market investing. With the continued rise in bond yields, increasing cost of money should keep volatility elevated in our view. However, for long term investors most of this is irrelevant. Even with these periodic bouts of volatility impacting short term returns, long term equity returns are primarily governed by earnings growth. Therefore, the ability to see through the near term noise is critical to long term investment success.