Around the globe, emerging economies have become a fixture of business news and investor speculation. But for an average, longer-term investor like myself, does it really make sense to invest in a market a world away from home? To get some answers, I caught up with EWI Asian-Pacific Financial Forecast Editor Mark Galasiewski.  We discussed one of the indexes he's been most optimistic about over the past year: the SENSEX.

 

Ian Forrest: For the past few years, fast-growing emerging economies have been all over the news. For investors interested in Asian markets, China is obviously a center of attention. Why should I be interested in India?

Mark Galasiewski: Emerging markets are going to offer some of the best long-term stock market opportunities for many years to come. Among emerging market stock indexes, India’s is one of the oldest, and the multi-decade patterns that we’ve identified in it offer the clearest long-term bullish view at present. India also offers more investment vehicles for international investors to participate in compared to other emerging markets that are in bull markets. Indians, though, are very lucky because they have so many options right at home.

 

IF: I tend to be more of a long-term investor; are emerging markets too unstable for me? Is India better suited to a particular kind of investment strategy?

MG: Anyone who’s looking for a multi-generational bull market to invest in should be interested in India. Long-term investors will probably appreciate our monthly publication, The Asian-Pacific Financial Forecast. Short-term traders may be interested in taking advantage of the greater daily swings in India’s stock market compared to those in most developed markets. Our Asian-Pacific Short-Term Update service publishes commentary on India’s CNX Nifty Index three times a week.

 

IF: That sounds like a pretty strong endorsement. So is this the time to get into the Bombay exchange?

MG: Actually, depending on when people are reading this, and your investment timeframe, now may not be the best time to invest in India. So you’ll have to subscribe to our Asian-Pacific stock market reports to determine the best entry and exit points. Remember, though, we do not offer trading advice. Our services try to identify the price patterns as they unfold, but it’s up to you to determine whether and when to buy or sell.

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Moves in the Sensex: Follow Mark Galsiewski's analysis of Indian markets with The Asian-Pacific Financial Forecast - read it risk-free online. Here's How.  

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 IF: You released an interim update in March that you've been referring to in The Asian-Pacific Financial Forecast pretty regularly. Why should we care about an interim report that you released over nine months ago? How valid can that still be?

MG: In the mid-1940s, at a time far more nervous than the present, Ralph Nelson Elliott said that the United States’ bull market would continue to run for “several decades.” He was able to make that forecast because of the clear long-term wave patterns that he had identified in the Dow Jones Industrial Average. None of Elliott’s intellectual successors—including Charles Collins, Hamilton Bolton, A.J. Frost, and EWI’s Founder and President Robert Prechter, Jr.—made any changes to Elliott’s original wave count. We believe that our forecast for India’s SENSEX will similarly stand the test of time.

 

IF: A lot of folks are worried about U.S. markets and looking to other markets to insulate themselves from any further turbulence in the NYSE down the road. How immune would the SENSEX be to a downturn in the U.S. economy?

MG: Elliott made a key observation about markets: You have to analyze each one independently. Think of the difference between Japan and the United States in the 1990s. Or how Australia’s stock market recovered to new all-time highs in 1934, just five years after the 1929 top. Or even how far above its year 2000 high the SENSEX trades now, while the S&P 500 sits well below its own. Those divergences represent the differences in each market’s long-term wave pattern. The major world indexes may ebb and flow together, but that doesn’t mean their structures are exactly the same.

 

IF: Based on some of your previous writing, I checked out some Indian news outlets. I quickly became aware of three things: I don't know what a lakh crore is; the politics make no sense to me; and I can't tell whose reporting is reliable. Are there any good voices out there for me to pay attention to? What's the best way to follow Indian financial news if you live outside of India?

MG: When you look at financial markets through the lens of the Wave Principle, after a while you will understand that news and opinions are useless. Very often the market appears to do the opposite of what it should—or the opposite of what it did last time under the same circumstances. Conventional analysts have no choice but to dismiss such inconvenient truths, because they have no other model to help them make sense of events. But we do have such a model: Markets are patterned according to the Wave Principle, and those patterns repeat over and over again at all degrees of trend—from intraday to multi-century. It’s a perspective you just can’t get anywhere else. It doesn’t always give the right answer—no methodology does—but we think it’s still the best forecasting method available anywhere.

 

IF: How can a U.S. investor invest in India?

MG: There are several ETFs and mutual funds that one can buy on U.S. exchanges. Search for “India ETF” or “India mutual fund” on the Internet, and they’ll come right up.

 

IF: Sounds easy enough. So what can the waves tell us about what's coming up for the SENSEX right now?

MG: Nice try! You know I can't just give that away. You'll have to subscribe to find out.