The one question we all want to know is whether a change of guard would mean that fiscal responsibility with respect to the government finances will be relaxed. If there is continuity, markets would be in for a ‘relief’ rally. Change or continuity? Will it make a difference to our investing strategies? How much will politics impact our investment decisions?Let us divide the problem in to two parts. And banks will be afraid to lend. One is the investment environment (bullish or bearish mood, FII perception of the markets etc) and the other is the earnings outlook.Whatever be the outcome, it is useful to have a strategy. Government spending money on infrastructure is rather limited as increased freebies leave little room for development expenditures.

One thing I have been noticing in these past few corrections is that ‘high quality’ does not China spring nuts Suppliers correct too much. He can be reached at balakrishnanr@gmail. With lesser and lesser government controls, the impact of politics on business is considerably less. Yes, some business houses will gain and some will lose, but by and large, there may not be too much impact. And if the broad indices show the fall, some investment in ETFs on the Sensex or the Nifty is worth considering.com). Businesses where the government is the customer tends to be impacted.(The writer is a veteran investment advisor. If we go in to the election manifestos of various parties, the battle seems to be more on freebies than on true economic development. A ripple through effect on mutual funds and lenders, means that non bank credit has to slow down. The policy risks, to my mind seem to be minimal. Irrespective of the party in power, business finds its friends.On the whole, the platform is clean. However, with the PSU bank clean up happening, a lot of businessmen have had to go for bankruptcy or shut shop.

I do not see the usual rush of pre-election result flows in, unless one treats the rally of Friday as something that will happen over the next week, before results are out. And in the list, against each name, put a price that you are happy to buy. Confidence to invest is still not visible and if there is continuity, new investments should happen. GST will at best be tinkered with, but structurally it is a solid concept.A change of guard would mean a ‘wait and watch’, leading to delay. It is best to keep away from it and wait for the Q2 results. At best there would be ‘’shuffling” of lines, some tokenism and so on. The investment environment will be immediately favourable if there is continuity. This gives a sense of comfort to big money that policies will not change. Whether it will be more of the same in the future, no one can say. It would be useful to keep a ‘buy’ list handy. It is best to keep away from that rally and wait for the June quarter results before considering fresh investments. Both of these reforms (irrespective of contradictory claims about the ownership on these two things) are big positives and in a sense limit the damage caused by freebies and there is some control on the flow. Do not get in to a reaction mode but in to a planned call based on outcomes.

Only the auto sector gave up some price thanks to slow down in the sales numbers. That way, you will avoid panic. Let us be clear.The investment environment will be immediately favourable if there is continuity.Hopefully, most invest-ors are holding cash now. So earnings growth would be subdued in any case.If there is a change in the government composition — then the markets could see an immediate correction. Valuations are not cheap (unless we anchor ourselves to 52 week highs) either. This is still ‘under repair’. A sharp correction can be useful to add to the portfolio of high quality stocks. Hopefully, those who invest in direct equities ‘know’ their sto-cks. More noise may happen outside the realm of economics. This week will see the outcome of the battle of the ballot.Today, the banks are far cleaner than an election ago.The other element is one of cronyism. Unless the next government totally changes either the GST structure or the pass through of subsidies by Direct Transfers.

My guess is no. Economic growth is a function of demand. More important is the tightness in liquidity that is being spread by the non-bank sector facing a crisis of confidence. If there is a change of guard, some fall out of favour and some come back to favour. The election results are unlikely to change earnings prospects.If there is continuity in the government, markets would be in for a ‘relief’ rally.Now, let me shift to corporate earnings.Thus, with muted prospects for immediate earnings triggers, market moves will be more based on perception of the election outcome. Every political party needs money and businesses tend to be ‘friendly’ with all parties