Your reading habits primarily influence your financial situation. If you are following the news and feel overwhelmed, it is not surprising.Your reading will pull you in the direction of both greedand fear. Just like multipledirect and indirect factors influence rain in a region, multiple factors influencethe reasons why you buy or sell any asset. They could vary from a personal perspective to a broader view of the economy and market fundamentals.
Personal news
You have a development at home and need money. It could be anything from an emergency to an investment opportunity that you have been eyeing for a long time. You pull money out for reasons that have nothing to do with the big-picture news or market fundamentals. These are your needs, and they need to be addressed immediately. Similarly, you look to invest because you have inherited money or property or received a bonus. The primary reason for you is to put your wealth to work. You need to consider your best options based on your goals. There is a pattern emerging. The rich deploy money in multiple asset classes but primarily protect their capital. Salaried individuals are taking up systematic investment plans with mutual funds.
Big picture news
The world is in a tizzy in the aftermath of regional conflicts and tariffs imposed by the United States. It is challenging to predict which countries serve as havens for global capital. In an era of ‘might is right’, there is still a preference for dollar-denominated assets. That is despite credit ratings agencies downgrading America’s ‘haven’ status. Many countries hoarded US Treasury bonds as a safe-haven security. However, since the downgrade, many central banks have begun to hoard gold. That is reflected in the soaring gold price in 2025. It is the top-performing asset class and serves as an indicator of fear in global financial markets. Equity assets are the worst performers. There are select countries that are performing well, but the overall picture is mixed. Indian equity markets are drifting despite a credit rating upgrade and tax cuts.
Market news
Indian equity prices are expected to remain in a flat-to-negative trading range through 2025. Foreigners have other cheaper equity asset options. A lot of the new money is finding its way into markets that have been beaten down. Indian equity markets have remained range-bound but have not witnessed a selloff that would make shares attractive again. It is mainly due to domestic funds of around Rs 30,000 crore per month, which are invested through mutual funds and insurance companies. However, for share prices to rally, Indian companies have to show a profit growth rate that is better than the current progression. In a note, DSP Mutual Fund highlights that for every Rs 100 worth of assets created by Indian companies, they were reporting sales of Rs 150 in the previous boom cycles. Now, most companies are earning only Rs 120-130. That has stopped businesses from investing more in capacity building. Private investment is struggling to take off despite declining inflation and lower interest rates. To add to that, the government has already cut personal tax rates in the Budget 2025, and the GST council has rationalised GST rates. The hope is that in the second half of the year, there will be a meaningful surge in rural and urban consumption.
The way forward
You need to know as much as possible. The responsibility is yours to make sense of all the news. You can split your news consumption into the three parts and absorb as much as you can. Your specific situation influences your personal decisions. The other two are on a need-to-know basis. You can dive deeper based on your interest and situation.