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Hello everyone… Hope you all are well and staying safe.

I was speaking to some of my friends and neighbours…. After almost a month of nationwide lockdown everyone seems to be adjusting to staying indoors and working from home. With the Coronavirus pandemic still not showing any signs of stopping in the near future is this life the New Normal?

There are 2 good news. First, the government has decided to open certain categories of shops and stores as a step towards partial opening of economy and second, IIT Delhi has come out with a COVID-19 testing kit at a very affordable cost. But still there is a long way to go before things are completely back to normal which means that the social distancing, face masks, staying indoors, work from home, schooling / coaching through video calls, zoom meetings, virtual trainings etc. is the new normal.

Global stock markets were in the grip of bears on April 24, 2020 after doubts were raised over the treatment for coronavirus. Even the Mutual Fund industry is also showing signs of recession. Franklin Templeton Mutual Fund, one of India’s most prominent mutual fund houses in fixed income is winding up six credit funds in the country with large exposures to higher-yielding, lower-rated credit securities due to a lack of liquidity. The investors will no longer be allowed to make fresh purchases or sales from these funds.

The first full trial of potential coronavirus vaccine of antiviral medication Remdesivir failed to show any effects.

So where are we heading… towards 3^rd phase of Lockdown?

What does all this mean for us as investors?

Measures in the right direction are necessary to defeat this pandemic and bring life back to normal but as the testing will increase, new cases are likely to emerge leading to extension of lockdown (partial or full depending on results) and other strict measures by government. World economy is going through a very bad phase and there is still a possibility of markets crashing by another 30% or so.

This means that in such a scenario the investors should keep adding good quality stocks to our shopping list and as the valuations become dirt cheap buy them for long term gains. 2 sectors to definitely keep an eye on are – Pharma and FMCG. I believe that good companies in these two sectors will be the biggest beneficiaries as health care is an absolute essential in times like these and demand in FMCG sector will jump as the economy starts opening again. Keep an eye on these sectors while you further adjust yourself to the new normal.

Happy Investing!

Warm regards,

Mayank Talwar