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Portfolio Organizer Magazine:
Understanding Intermarket Dynamics
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Understanding the intermarket dynamics is much more complicated than it sounds. This article studies the elements of intermarket dynamics such as bond market, equity market, commodity market and currency market.

 
 
 

Just about a month back, launching a "dedicated Brazil, Russia, India and China (BRIC) Fund" seemed to be a staple for every fund manager worth his salt. Emerging market portfolio allocations to India were on their way up and it was ceremoniously proclaimed by looking at the numbers, quite frankly, that India offered the maximum scope for value accretion among the emerging financial markets.

So what's changed since then? Nothing except that the secular "super cycle" across asset classes and economies has witnessed a sharp correction. Nothing except that we have witnessed the first ever 1,000 points fall in the Indian benchmark index in a little over two trading hours. Nothing except that volatility has become so much a dirty word that every trader would rather have the sword of Damocles hang over his head than be forced to call the market in this phase.

If you are looking for a method to study this madness, you are just one in the crowd. What will separate you from this fickle mob is exactly how you go about it. While it is often true that manic falls like the 1,111 point crash witnessed on the Sensex on May 22, they are triggered as a result of the market internals like, margin calls on overleveraged positions. It is also extremely critical that we do not lose sight of the fact that all this is a part of a bigger picture involving multiple externalities, which do not prey on equity markets alone.

 
 
 

Portfolio Organizer Magazine, Intermarket Dynamics, BRIC Countries, Financial Markets, Equity Markets, NASDAQ, Commodity Markets, Equity Markets, Asset Markets, Intermarket Dynamics, Federal Reserve, Industrial Commodities, Behavioral Analysis, Indian Technology.