Finimize - 🇮🇳 Down on India

Goldman Sachs downgrades India, BlackRock hurls itself into AI, and graveyard picnics |
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Hi Reader, here's what you need to know for October 24th in 3:15 minutes.

  1. Goldman Sachs isn’t feeling India right now, pulling back amid weaker growth and earnings disappointments
  2. There are three huge takeaways from Andreessen Horowitz’s crypto report – Read Now
  3. BlackRock’s charging into the AI boom, with two new ETFs designed to harness the technology's explosive potential

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Shifting Gears
Shifting Gears

What’s going on here?

Goldman Sachs just hit the brakes on India’s stocks, blaming a slowdown in growth and some disappointing corporate earnings.

What does this mean?

Goldman’s stance has gone from “overweight” – meaning it expected stocks to outperform other markets – to “neutral”. Mind you, the investment bank’s not predicting a crash, but it does think Indian stocks will take a breather and move sideways for a while. The economy's losing steam and company profits are under pressure – pointing to weaker activity all around. Goldman’s own growth forecasts for India next year are well short of what other investors are predicting, and the valuation issue isn’t helping matters. Indian stocks are looking pretty pricey, similar to past market peaks, making gains tougher to come by. Add geopolitical tensions, a slew of new regulations, and an influx of new stocks into the mix, and you've got quite a few hurdles in the way.

Why should I care?

For markets: Stock markets ain’t the economy.

India’s a good reminder that strong growth doesn’t always lead to strong stock returns. In fact, research has shown there’s often little connection between the two: investor sentiment, valuations, and other factors tend to matter more. Just look at China: it’s seen decades of rapid economic growth, but its stock market returns haven’t always kept pace. So if you're eyeing Indian stocks, make sure it's for more than just the growth story.

The bigger picture: Spread the love.

Goldman’s not just cautious on India – it’s also lowered its long-term expectations for US stocks. Its analysts are forecasting annual returns of just 3% for the S&P 500 over the next decade, a far cry from the 13% average of the last ten years. That’s a wake-up call to diversify – across regions, sectors, company sizes, and asset classes – to make sure your portfolio stays on solid ground. And, yes, you can still factor India into that mix, but make sure it’s part of a balanced approach.

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TODAY'S INSIGHT

Three Things That Jump Out Of Andreessen Horowitz’s State Of Crypto Report

Jonathan Hobbs, CFA

Three Things That Jump Out Of Andreessen Horowitz’s State Of Crypto Report

Andreessen Horowitz (a16z if you’re in the know) manages about $50 billion of investor assets, making it one of the world’s heftiest venture capital funds.

But more importantly, the firm is big into crypto – and it publishes a comprehensive, must-read, annual State Of Crypto report.

I’ve just read through the latest edition and pulled out a few timely opportunities for you.

That’s today’s Insight: three huge takeaways from Andreessen Horowitz’s crypto report.

Read or listen to the Insight here

A kiss on the hand may be quite continental, but gold can be an investor’s best friend

We’re connected to our ancestors in many ways: the way we look, speak, behave.

And of course, the fact that we go ga-ga over a shiny brick of gold. Humans have been using the precious metal as a store of wealth for thousands of years, and it’s no wonder why.

Gold is virtually indestructible, it doesn’t decay, it can take portable forms like coins or jewelry, and it’s in finite supply. Plus, it’s pretty.

So no matter whether you’re prepping for a doomsday wipe-out of global currencies, or just looking to diversify a tad more, you might want to know how – and why – to invest in gold.

Well, you’ve struck – ahem – gold: you can check out Goldcore’s guide about investing in the precious metal for free.

Read The Guide
Diving In
Diving In

What’s going on here?

BlackRock is jumping headfirst into the AI wave with two new actively managed exchange-traded funds (ETFs).

What does this mean?

AI is reshaping industries, and BlackRock wants in via the medium of active ETFs. Remember, they’re not much different from regular ETFs, which track an underlying asset or index, except they’re actively managed by fund managers trying to beat the market’s returns. First up is the iShares AI Innovation and Tech Active ETF (BAI) which targets AI powerhouses like Nvidia and Microsoft, as well as emerging players like Astera Labs, for an overall focus on AI infrastructure, models, and applications. Next is the iShares Technology Opportunities Active ETF (TEK), which casts its net wider by investing in up to 70 companies across semiconductors, software, hardware, and other tech areas that are set to be transformed by AI’s rapid growth.

Why should I care?

For markets: Tread carefully.

These investments offer easy access to AI with active management, but be cautious – new ETFs often launch when valuations are sky-high, which can lead to a rocky performance. A smarter strategy might be to add overlooked companies to your portfolio like data center power suppliers, cooling system specialists, or information services companies providing key data and analytics. These under-the-radar plays could benefit from AI’s growth, offering a more balanced way to score a win from its potential.

The bigger picture: To bubble or not to bubble.

One of the world’s biggest hedge funds, Bridgewater, is calling it: the AI bubble hasn’t peaked – it’s just getting started. It sees AI as game-changing technology, backed by good feeling, solid growth, and a supportive wider environment. Sure, AI investment has been concentrated so far among a few major players, but as it matures, the hedge fund says it expects industries across the board to jump in, leading to a wave of cash flow and a deep market impact.

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QUOTE OF THE DAY

"It's a mistake to think once you're done with school you need never learn anything new."

– Sophia Loren (an Italian actress)
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🇺🇸 What you need to know before casting your vote

Don’t worry: we’re not about to reignite your family feud about the upcoming election.

See, the US election will impact investments no matter the outcome – and you need to prepare your portfolio for that hard truth.

So join IG for our exclusive Election Special event: you’ll get the lowdown on key economic policies, their potential impact, and how different outcomes could affect your investments.

After all, you’d rather be proactive than reactive: the election outcome may be out of your hands, but you can control your portfolio so you’re not caught unawares.

Grab your free ticket and get clued in.

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🎯 On Our Radar

1. Dining from beyond. One writer’s experience of taking picnics to graveyards.

2. Trading platforms are a dime a dozen. Here's how to find one that's really worth your money.**

3. Small but mighty. A tiny dinosaur egg of a new species has been found in China.

4. The metaverse could change everything. Prepare yourself for a new investing landscape.*

5. Cool, calm, and collected. How cacti stay chill in the harshest of climates.

** Your capital is at risk. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

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🇺🇸 Post-Election Special: The Landscape, Regardless Of Who Wins: 5pm, November 7th
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