Inside India - Part II

Add comment February 13th, 2008

  Jody J. Jungerberg, MBA, CFS, ChFC, CFP® 

What are some of the more striking changes in India versus what it was like when you were growing up? Financially, everything! 

From your own personal perspective, why does investing in Indian companies or an index fund that focuses on India important to you? I have been visiting almost every year and the economy just keeps getting bigger. I don’t want my portfolio to be achieving a 5% growth only when I can see an economy on the rise.   I am not betting on one stock, but betting on an economy. I feel like some large portion of my portfolio should be allocated to this winning streak while it lasts. I’m realistic enough to realize that at some point it will lose steam, but unlike the dot com boom, I don’t think this is a bubble. I hope I have achieved enough growth by then.  

What are some of our more common misperceptions of life in India? There are elephants in the streets and kids play with camels !!! There is the stray elephant on a street, but there are millions of automobiles alongside. Kids play with computers, and chat on the internet. Yes, 50% of the population is devastatingly poor, but the other 50% (1 billion people) are getting better off everyday. 

Are we, as investment advisors, early or late in the game in looking toward India and Indian companies to invest in? In my opinion, still way too conservative.  How can one advise that only 10% of a portfolio should be invested internationally? It’s fiscally irresponsible to pay so little attention to all emerging markets. India is no exception. 

You told me that you and your wife came to the US for graduate school.  Did you consider returning to India when you were done?  What was higher education like there versus here?  No. We came here 25 years ago. The picture in India wasn’t so rosy then. In fact it has turned seriously only in the last 5 years. However, many Indian graduates who come today definitely consider going back - and many do. Grad schools here are still better than in India, but early education is far broader in India - all the way through undergrad school. Of course, you have to be able to afford it.