Year 2013: Was It Just Eventful Or Historical?

It’s only a matter of hours now when we will be celebrating for 2014. Every year I write about making New Year Resolutions and how to follow them. This year it’s not going to be different as all those Resolutions holds true. But 2013 was such an eventful year that it’s difficult to miss out describing what has happened? The year brought changes which will go down in history for creating a new trend for the future.

Here is recap of some of those changes in 2013 which will be remembered for the time to come:

1. Politics– A democracy is known for its politics and politicians. There was large disappointment among us as  both were failing. The series of big time scams and then the failure of any economic reforms in last few years was actually digging a hole in aam aadmi pocket. This lead to a huge outrage and the evolution of new political party AAM Aadmi Party. The 2014 is a year of general elections and 2013 state elections were seen as a semifinal for the Lok Sabha. Although states like Rajasthan saw a clear shift in the mind of voters, it was Delhi which experienced a historical event when AAM Aadmi party won in their first election. The shift from congress was expected but towards AAM Aadmi party was something which even the two big national parties thought the least. It changed the rule of Indian politics when Indian voters considered someone who is one among them, standing beside them and ready to discuss their problems. The leader of the new party has already taken the oath of  a CM, amid all drama of unconditional support from the party against which they laid the foundation of their movement. But the fact cannot be taken away that this sea change has forced the two big parties and the biggest politicians of our country to talk on honesty and integrity for a common man interest. Such a change was not seen before and with AAP gearing for Lok Sabha elections the politics of the whole country is talking on different tone now- Work with honesty, Ensure you are not corrupt and Make yourself reachable to common man. Will Year  2014  be more historical- Next year general elections will tell us but yes, for now history has been created and the fear among the corrupt have been raised…A change for good.

2. Economy– There was not much for Indian economy to rejoice. The equity markets did not favored investors while the Debt markets continued with their volatility. Every monetary policy was seen with expectation of easing rates but high inflation ensured RBI is not going to do it very soon. In fact there was a quarter when RBI acted against the wishes of everyone and we saw even the safest investment avenues as they are considered, liquid funds, taking the worst hit. The see saw of economy not doing well and doing fine was there in year 2013. In the last two quarters even the most trusted investment by Indians i.e. gold, saw few restrictions from the finance ministry and the regulator, RBI,because it was finally impacting our economy. The reasons can be laid down for what has happened but the year 2013 does not gave a sound sleep to investors.

3.Investing Opportunities– Surely, most investors considered that equities will not deliver and so there were not much of opportunities there. The gold started losing its shine with regulators and government laying a controlling hand on it. Real estate has always been a tough market for the real buyers. But it was debt market which actually gave a respite to the investors although there was a knee jerk experience  too. The rise in interest rates ensured that short term mutual funds continue with their good performance and long term debt funds prepare for theirs in future. The launch of numerous tax free bonds and few NCDs gave opportunities for earning those returns which we expect from this avenue. The rates on small savings schemes were also kept high due to the high interest rates scenario ensuring the investors’ interest do not go away from them. So there was good enough investing opportunities from fixed income which, when interest rates starts falling, will reduce.

5. Regulations– It was an year for regulations. Be it in insurance, mutual funds or investment advice, every industry saw a series of regulations for benefit of consumers. First it was direct plans in mutual funds which made investing in this instruments more cheaper by investing directly and not through any intermediary. Then,  IRDA came out with changes in insurance products  where health insurance saw some changes which will make claims easier for consumers and life insurance will experience a major change in products, especially traditional, from January 2014. Mutual Funds then again saw a series of regulations including guidelines for formation of SRO and Draft Paper for Real Estate Mutual Funds. But there were two changes which can be termed as historical- Change in the Companies Act and SEBI (Investment Advisers) Regulations, 2013. Where the companies act have paved the way for a one man company also which will help many small business owners, the SEBI new regulations on soliciting Investment Advice  laid the foundation of fiduciary responsibility among the advisor fraternity. There are already few registered investment advisers now and we will see this number increasing in the future. Surely a different future is already set for consumers of this country.

There might be more  which will have a reason to be in your books but in my view the above listed ones are trend setters for the future. If new political party armed with a fight for corruption for common people has inculcate among big leaders the sense of bringing honesty , then the new regulations by SEBI will also bring a sense of responsibility among advisors. Surely the future will be different then what you and I have been living with and so there is more reason to celebrate Year 2014 .

Happy New Year!!!!!!!!!!