The Gujarat elections are over. BJP is all set to form the government again. More than anything, it is a victory for brand Modi over the opposition. In fact, the performance of the Congress party cannot be said to be bad. Yet they failed to reach the magical mark of 92 seats to form the government. Moreover, the Gujarat elections results have a direct impact on the stock market. For instance, the Sensex swung more than 1,000 points in a single session on election result date.
Stock Market and Elections
The global and domestic factors have a direct impacton the stock market. In fact, the investors experienced a roller coaster ride on the date of election results. Thus, the investors in the stock market can take good lessons from the election results. Therefore, in this article, we shall see the things that investors can learn from the Gujarat elections.
1. Long-Term Focus
BJP came to power in recent state elections in Gujarat due to its long-term focus and planning. It is not a hidden fact that Gujarat is among the most developed states of India. It is so because of the long-term focus of the BJP government to grow and develop the state of Gujarat. Similarly, the stock market also demands long-term focus while investing. The compounding power of stocks is incredible. Thus, the investors should always have the patience to hold good stocks for long-term to reap its real benefits.
2. Never Ignore
Even though BJP won the Gujarat elections, yet it has to pay the price for ignoring the rural voters. The urban-centric policies of the BJP government led to its downfall in the rural areas. Therefore, BJP received a massive set back in the rural seat share. Similarly, ignoring anything in the stock market can lead to losses. Thus, an investor needs to be always aware of the various factors and news flow that can have a significant impact on the portfolio.
Planning in any area or aspect of life helps in achieving better results. BJP won the Gujarat elections with the help of good planning. In spite of many issues like Patidar agitation, demonetization and GST impact, etc. it managed to overcome all the odds. This was possible only because of the well-planned election campaign and tapping the Modi brand rightly. Similarly, investment in the stock market requires good planning. Moreover, a portfolio that is built with good planning will always sustain and give good return even when the markets are not doing well.
4. Strong Foundation
One reason why BJP won elections in Gujarat is its strong foundation. Over the last 22 years, it has ruled the state. Hence, it understands the state right from its grassroots. This gave them an edge over the Congress party. Similarly, in the stock market, investment should be made in companies that have a strong foundation. A company with a strong base can give the investors higher returns. In addition, the money invested in companies with a good foundation is relatively safer and has almost no risk of capital erosion.
5. Visible Brand
The one major factor that contributed to the victory of BJP is brand Modi. Undoubtedly, Narendra Modi is the most popular brand in the country. The Gujarati voters showed their trust towards the brand Modi and gave votes to his party. In fact, Modi brand has been the major crowd puller in the elections rally and ultimately the votes. Conceding that, the investors in the stock market should also consider the brand value of a company before investing. The shares of companies that have strong brands surge at a rapid pace and generate good returns for the investors.
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