When interest rates rise, existing bonds become less valuable and most debt fund NAVs fall. When rates fall, those same bonds are worth more and debt fund NAVs typically rise. Equity funds, on the other hand, feel the impact through valuations and earnings expectations: higher interest rates compress P/E multiples and raise discount rates; lower rates do the opposite.
Liquidity as the New Driver of Market Dynamics
Gold is often praised as a protection against inflation, but it’s important to remember that correlation is not causation. Throughout my career, I have observed that gold offers reasonable protection against inflation. It is not a perfect hedge, but it is better than most alternatives for those who wish to protect themselves from inflation risk.
For years, Indian car buyers have prioritised mileage, with hatchbacks and sedans symbolising urban aspirations. Yet, even then, Multi-Purpose Vehicles (MPVs) held their ground – valued for their space, power and durability.
The Indian Rupee (INR) has been on a weaker trajectory in 2025, depreciating by 3.7% against the US Dollar as of September 30, 2025. This comes even as the US Dollar Index has declined by around 10% against other major currencies. Consequently, the INR’s fall against key global currencies has been even more pronounced.
Policy Action
The Monetary Policy Committee (MPC) voted unanimously to keep the policy repo rate unchanged at 5.5%.
“Data is like garbage. You’d better know what you are going to do with it before you collect it.”
(Source: Unknown)
In the past, building a corpus of wealth over time was considered a far-fetched dream for a middle-class salaried employee. Only a select few succeeded with strict and disciplined savings. But today, Systematic Investment Plans (SIPs) have made it possible for salaried employees to dream of and aim to achieve a substantial corpus over time, thanks to the power of compounding.
It was hot in the last week of June: 32°C in Zurich, 35°C in Milan and a scorching 40°C in Athens. I was in the thick of it, travelling across Europe for a sales roadshow. Ironically, Mumbai’s Monsoon offered far more pleasant weather. The European summer heat mirrored the heat in global conversations around policies, investments and uncertainties.
For many people investing for the first time, a 250 rupees SIP may feel comfortable and accessible. Just by committing to this pocket-friendly amount, you can start on the path of disciplined savings without putting too much stress on your budget. This method works in favour of investors who want to begin investing in an SIP, as it lowers the barrier to entry, making it a more accessible option.
