Indian investors have started reallocating their investments portfolio amidst rising inflation and a likely interest rate hike. A survey by ING, a Dutch financial services firm indicated that 40 percent of Indian investors were willing to re allocate their investments in order to beat inflation.
The survey also said that eighty three percent investors in India expect that the inflation, measured by WPI (Wholesale Price Index), would rise very soon. Sixty four percent of the surveyed group said that the domestic rates were likely to increase in the third quarter.
Investors were optimistic about the stock market but believed that investing in stock market would not help them fight inflation. Investment avenues like Mutual funds were also being considered inadequate to beat inflation. Most of the Indian investors had started shifting to avenues like real estate and gold to equip them for the rising inflation.
The survey revealed that most of the Indian investors felt that their financial situation had decreased 19 percent in the third quarter of 2009.
The survey said that only 47 percent of the surveyed investors expected India to cross the GDP target of 7 percent this financial year, despite the country being the most optimistic market in the region. It said that the investors were expected an increase of 8.5 percent in the fourth quarter.
ING survey said that 65 percent of the investors preferred to do their own financial planning to relying on advisors. ING Investment Management India, Managing Director and CEO, Navin Suri, said that this is unlike other Asian markets like Australia where investors pay fees to the advisors. He said that there is a huge scope for financial planners in India.