Thursday, 23 May 2013

What are the things that an investor should not do when rupee depreciates?

Though prediction of rupee is very difficult for an investor to understand but abnormal fluctuations of rupee certainly upsets the plan of any company, thus affecting the prediction of price movement in any stock.

Since we are in a phase where INR is continuously depreciating against USD, it is better to avoid such stocks where import content is very high or the companies which are net importers.

Investors should avoid investing in companies which are heavily dependent on imports for their raw materials.

So, the companies where the import content is much lesser than their exports or the companies which have a pricing power to pass on their costly imports to their customers should be identified to invest.

Investors should invest in such companies which are export oriented, where the depreciation of rupee will be beneficial to them

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