As a long term investor, you need to be very clear about why you are investing in the Indian equity markets. If the logic is clear, one will normally stick with their investment plan and not get perturbed by market conditions.
In addition, if the reasoning is simple and clear, it is even easier to stick with your plan.
Most large investors, especially foreign investors, have a simple reasoning to invest in India.
1. India’s GDP is currently about $ 2.7 trillion (this figure may change a bit based on USD / INR rates). Over the long term, nominal GDP will keep growing, at a rate close to 10% pa.
2. One of the main reasons for the growth is that, the Median age of the population in India is close to 28 years, which is significantly lower than all other large economies.
A younger population means, there are more people out there who are up-skilling themselves, want to earn more, and spend more. The average Indian is yet to buy a car, yet to buy a house, is probably considering a marriage and sending his or her kids to college is a choice which is not even on the radar.