Credence Family Office

Fed’s Dilemma: Rate Cuts, Inflation & New Uncertainties 👉 As 2024 comes to a close, the Federal Reserve faces familiar challenges: Inflation is slowing, but not smoothly, making rate cuts tricky. 👉 A 25 bps rate cut is widely expected at the upcoming FOMC meeting outcome, marking the 3rd in a row. But inflation—now at 2.7%, up from 2.4% in September—remains stubborn. Grocery and gas prices that have been the major contributors to the decline in overall inflation, saw an uptick in the November CPI data, with housing costs also not easing much. The 📊 below highlights the fact that while inflation has come a long way from its mid- 2022 highs of 9.1%, we might see a delay in its return to FED target levels of 2%. 👉 Fed Chair Jerome Powell is being careful, trying to avoid 2 risks: 1.) cutting rates too fast and fuelling inflation OR 2.) keeping rates too high and hurting growth. 👉 Adding to the complexity are fiscal plans from the Trump administration, like import tariffs and tax cuts. Tariffs on imports from China, Mexico, and Canada could push inflation higher, while tax cuts might boost spending, making it harder for the Fed to keep prices under control. As Powell said, “We can afford to be a little more cautious.” But with strong growth and new uncertainties ahead, the road for 2025 looks challenging. What’s your view—will the Fed’s patience pay off, or are bumps ahead? Share your thoughts! #FederalReserve #Inflation #RateCuts #Economy2024 #FOMC #InterestRates #EconomicGrowth #InflationTarget #FiscalPolicy #USEconomy #JeromePowell #InflationControl #EconomicUncertainty #Tariffs #TaxCuts #MarketOutlook Mitesh Shah Ajay Sampath Aravinda Subramanyam Chanchal Agarwal Krishnaprasad Ramanathan Neha Joshi, CA Nitesh Arora ✍ : Hetvi Modi Bhurat

🏆Credence Wins the IPV Wealth Wise Partner Award 2024! 🎉 We are thrilled & deeply honoured to share that we have been recognised with the prestigious IPV Wealth Wise Partner Award, at a glittering event. This accolade reflects our unwavering commitment to delivering innovative, client-focused, wealth management solutions to our discerning clientele & our dedication to excellence in the financial advisory space. Gratitude to our clients for their unequivocal support & a heartfelt thanks to the team, whose hard work & passion are the cornerstone of our success. Lastly, a big shout out to Inflection Point Ventures for recognizing our efforts & bestowing us with this honor. As we celebrate this milestone, we are reminded that success is not a destination but a journey of continuous improvement & learning. This award strengthens our resolve to push boundaries, deliver exceptional service & set new benchmarks in the wealth management industry. Here’s to a future filled with innovation, collaboration, and continued growth! Let’s keep making waves together! 🌟 Mitesh Shah Ajay Sampath Aravinda Subramanyam Chanchal Agarwal Krishnaprasad Ramanathan Neha Joshi, CA Nitesh Arora

We are hiring! We are looking for HR -Manager for Bangalore location. If you fit this role, please email your resume to careers@credencefamilyoffice.com #hrjobs #hrcareers #financialservices #bangalorehrcircle Mitesh Shah Ajay Sampath Aravinda Subramanyam

It’s okay if you’re eyeing that COACH bag—looks like everyone’s tilting towards luxury these days! 👜 😜 India’s luxury market is on fire, projected to cross $8.5Bn by 2026 (Statista, 2024), already contributing 8% to the global luxury market. In 2024 alone, global brands launched 50+ India-specific products & invested over $500Mn to expand their footprint (EY India). 🔑 What’s Driving the Boom? - Rising Incomes: India’s per capita income has surged 55% in past decade (World Bank), with no. of individuals earning > ₹1Cr annually growing by 15% YoY, now standing at 1.7Mn, empowering people with high disposable income. - Wealthy & Young: With 6,000+ UHNIs & 140 billionaires, India’s wealthy class is younger—60% are under 45. Millennials & Gen Z now drive 70% of luxury purchases. - Tailored Offerings: From India-exclusive designs to private-label collaborations, global brands are betting big on local preferences. - Tier 2 cities now account for 35% of luxury sales - proof that affluence is no longer confined to metros. - Luxury Hospitality: Growing at 18% CAGR, with brands like Taj Hotels, Aman & Oberoi blending experiential stays with wellness tourism. - With younger consumers preferring online channels for luxury shopping, E-commerce platforms like Tata CLiQ Luxury & Ajio Luxe have reported a 200% rise in Tier-2 & Tier-3 city transactions. Luxury e-commerce in India is expected to grow at a CAGR of 15% through 2026; 💹 What’s in It for Investors? - Luxury boom is a signal of India’s growing wealth & economic health. For investors, this implies lucrative opportunities in premium Consumer Discretionary stocks, Hospitality & Real Estate, Technology & Luxury Wellness. - PE & VC firms are already betting big on this space, with potential for luxury-focused IPOs on the horizon. #LuxuryInIndia #IndianEconomy #LuxuryMarketBoom #InvestInLuxury #HNILifestyle #AffluentIndia Mitesh Shah Ajay Sampath Aravinda Subramanyam Chanchal Agarwal Krishnaprasad Ramanathan Neha Joshi, CA Nitesh Arora ✍: Hetvi Modi Bhurat

Global economy enters 2025 on stable footing, supported by macro resilience & robust services spending. However, the U.S. economy—central to this outlook—may face rising inflation & trade disruptions under the new administration, potentially tightening global financial conditions, particularly for EMs. Volatility is expected to rise as trade tensions escalate. The image 👇 highlights GDP growth forecasts for the coming years: 1️⃣ U.S.: Expected to grow 2.0% over the next 2 years, following 2.7% in 2024. Trump policies may drive short-term inflation & risk slowing economic growth in the medium to long term. Fed is likely to gradually reduce rates, reaching 3.1% by late 2026, while risks of disruption to the "easing" trends remain. 2️⃣ Eurozone: Forecasted GDP growth of 1.2% in 2025, with Spain outperforming & Germany lagging. Lower energy prices could reduce inflation, prompting faster ECB rate cuts to 2.5% by mid-2025 amid weak economy confidence & improved disinflation visibility. 3️⃣ China & Asia-Pacific: China’s GDP is projected at 4.1% in 2025 & 3.8% in 2026, with U.S. trade tariffs weighing on exports. Asia-Pacific would face slower global demand but could benefit from easing interest rates & inflation. Central banks are expected to cautiously lower rates amidst capital flow fluctuations driven by shifts in U.S. rate expectations. 4️⃣ Trade Tensions: Modest tit-for-tat tariffs between the U.S. & China in 2025 are expected, with minimal additional tariffs globally. While this may have limited GDP impact on most EMs apart from China, trade-related uncertainties & tighter financial conditions pose significant downside risks. Will India's economic resilience continue to shine as global volatility rises, or will external factors hinder its progress? Source: S&P Global #GlobalEconomy #IndiaGrowth #EmergingMarkets #TradeTensions #EconomicForecast #Macroeconomy #Inflation #CentralBankPolicy #GlobalTrade #FinancialStability Mitesh Shah Ajay Sampath Aravinda Subramanyam Chanchal Agarwal Krishnaprasad Ramanathan Neha Joshi, CA Nitesh Arora ✍ : Hetvi Modi Bhurat

NVIDIA Leaves Entire Developed Global Markets Behind 🚀 🤯 The chart👇 shows how Nvidia's market value compares to the total market value of 8 developed countries, tracked monthly since Jan '23. Each block represents a country's total market size, with a transparent layer showing Nvidia's value relative to it. When Nvidia's market value surpasses a country’s total market size, the block becomes solid. In May '23, its market cap first surpassed the combined total of Italy, Spain, & Portugal. By Jan '24, it had overtaken the entire market sizes of Australia, Germany & the Nordics. By June '24, Nvidia achieved another remarkable feat by exceeding the market value of UK—one of the largest & most developed economies in the world.   This growth underscores Nvidia’s pivotal role in the AI revolution. Its GPUs, which were once primarily gaming-focused, have now become the backbone of AI systems. The AI hype & Nvidia’s ability to capitalize on it have made the company a megacap juggernaut, sparking conversations about whether valuations of tech companies like these could reshape global markets. ⚠️ While Nvidia’s story is inspiring, it also raises questions about concentrated market risk. How much reliance is too much reliance? Where do you see the balance between tech innovation & valuation sustainability? Source: MacroBond #AIRevolution #Nvidia #Innovation #Economy #ArtificialIntelligence #SemiconductorIndustry #TechValuation #FinancialMarkets #GlobalEconomy Mitesh Shah Ajay Sampath Aravinda Subramanyam Chanchal Agarwal Krishnaprasad Ramanathan Neha Joshi, CA Nitesh Arora ✍ : Hetvi Modi Bhurat

Vision. Execution. Result !! Under the visionary leadership of our Founder & CEO- Mitesh Shah, Credence Family Office has taken bold steps to innovate in the investment space. Our continuum/secondary-only fund is a testament to this foresight, delivering 2 successful exits with ~100% returns in just ~2 years. Together, we aim to redefine wealth management & scale new heights. Link to the article: https://lnkd.in/d4M8ss5q Ajay Sampath Aravinda Subramanyam Chanchal Agarwal Krishnaprasad Ramanathan Nitesh Arora Neha Joshi, CA

Recently, came across a very interesting survey done by Yale, on investor sentiment. The 📊 below illustrates 2 key metrics: 1.) Crash Confidence: It measures how confident investors are, that there WON’T be a market crash in the next 6 months. - The image 👇 shows, individual investors are currently least worried about a market crash since June 2006, reflecting a sharp rise in optimism. However, this level of optimism often signals complacency (self- approval), which has historically preceded market corrections. - Institutions, while optimistic, remain slightly more cautious. 2.)Valuation Confidence: It reflects how confident investors are that the market is NOT overvalued. - The image 👇 shows, both institutional & individual confidence in valuations have declined sharply, suggesting concerns about stocks being overpriced. Institutions show slightly higher confidence than individuals but both groups agree—valuations are stretched! Aren’t these two metrics contradicting each other⁉️ If the market is overvalued, shouldn’t we be more worried about a crash? - Does this mean, while investors see the markets overvalued, they seem to believe any correction will be gradual, not abrupt? - Does it reflect a belief that stretched valuations won’t trigger immediate downturns, likely due to faith in central banks, liquidity, or economic growth. ⚠️ Well, history has it - periods of high crash confidence & low valuation confidence have often preceded market volatility or corrections. #MarketInsights #InvestorSentiment #StockMarketTrends #FinancialAnalysis #MarketVolatility #InvestmentStrategies #BehavioralFinance #CrashConfidence #MarketOutlook Mitesh Shah Ajay Sampath Aravinda Subramanyam Chanchal Agarwal Krishnaprasad Ramanathan Neha Joshi, CA Nitesh Arora ✍ : Hetvi Modi Bhurat

Personal Finance Hack 101: Buy a House with Bank’s Money; Pay Debt with Tenant’s Money; Cashflow Goes into Investment; Appreciation Grows Your Net Worth. Well, it’s not as easy as it sounds, but it sure works! Here’s how it unfolds: Assuming, you buy a property worth Rs. 1 Cr with a loan from the bank. Let’s break it down: Property Price: ₹1 Cr Loan Amount (80% price): ₹80L Loan Tenure: 20Y Int. Rate: 9% p.a (current home loan rates) Down Payment: ₹20L Monthly Outflow: Monthly EMI: ₹71K approx Expected Rental Yield (3.5% rental yield p.a): ₹29K Net Outflow(EMI - Rent): ₹42K (for now) In the beginning, your rental income won’t cover EMI, so you’ll need to fund difference from your income. As rent increases, equation will eventually tilt towards + cash flow. See image 👇. You may need to cover outflow for upto 14 years. However, this timeframe could change depending on you refinancing your loan during rate cuts, opting for higher EMI payments when possible & receiving higher rent than what’s projected here ( I’ve taken a more conservative approach here). After 5 Years: Rental Income (with 7% annual increase): ₹40K/month Total EMI paid in 5 years: ₹43L (9L Principal + 34L Int.) We all know, initially, a major chunk of EMI goes towards paying off the interest. But over time, the principal repayment portion ⬆️ & int. repayment ⬇️ . After 10 Years: Property Value (with 7% annual appreciation): ₹1.97 Cr Rent Received: ₹48.35L EMI paid: ₹86.37L (23L Principal + 63L Int.) Net Wealth Created in 10 Years: Property Value + Rent Received – Interest Paid = 1.97Cr + 48.35L – 63L = ₹1.82 Cr (approx.) Congrats! You now own a property that was purchased using bank’s money, partially paid off through tenant’s rent, giving you a CAGR of around 6% in last 10 years. (I know, 6% isn’t too exciting, but hang on, it gets better!) What Happens After Year 15? As you could see in the image 👇 , from Year 15, your rental income will surpass your EMI payments. Your +ive cash flows will keep on growing with rise in rent. Reinvest these +ive cash flow into MF SIPs. After 20 years, Property Value = Rs. 3.87 Cr SIP Value @ 12% CAGR = Rs. 20L approx (Assuming avg of the net inflows invested from Year 15 to Year 20) Total Wealth: ₹4.07 Cr (3.87Cr + 20L) Voila! That initial investment of ₹1 Cr has grown into a whopping ₹4.07 Cr & you now own the house of your dreams, using your own resources, that also yielded you 7% CAGR (or greater) over 20 years. In cities like Hyderabad & Ahmedabad, where rental yields range from 4-5%, investors often find that rental income covers more than 50% EMI. In metros like Mumbai & Delhi, while rental income may not cover EMI initially, high property appreciation outpaces the lower rental income, making it a perfect long-term investment. Mitesh Shah Ajay Sampath Aravinda Subramanyam Chanchal Agarwal Krishnaprasad Ramanathan Neha Joshi, CA Nitesh Arora ✍ : Hetvi Modi Bhurat

The GREAT BOND SELL-OFF !!! 👉 Foreign investors traditionally buy Indian bonds to earn steady income through interest payments. However, recently, there has been a significant sell-off, with ₹4,960 Cr. ($588 million) worth of Indian bonds being sold through FAR(Fully Accessible Route) in just one week, the largest weekly outflow since Indian bonds were included in JPMorgan’s major emerging-market bond index in June. FAR (Fully Accessible Route) Bonds??? 👉 The Fully Accessible Route (FAR) is a special category of Indian government bonds that allows unlimited foreign investor participation, introduced in 2020 to attract global capital & enhance India’s presence in international bond indices. Why Are Foreign Investors Selling? 👉 The primary reason for sell-off is rise in U.S. government bond yields. U.S. Treasury bonds are considered one of the safest investments in the world. When their yields rise, investors often shift their money into U.S. bonds for security. 👉 After Trump came to power, expectations of higher government spending & inflation squashed hopes for any further rate cuts, which led to an increase in U.S. bond yields making them more attractive compared to Indian bonds. 👉 The difference in yields between India’s 10-year bonds & U.S. Treasury bonds has narrowed to just 2.43%, one of the lowest in recent years. (see Image below). This means Indian bonds are no longer offering returns that are high enough to make them appealing when compared to U.S. bonds. Well, the RBI is playing its part too. 👉 With inflation surging, the RBI has taken a hawkish stance, resisting the urge to cut interest rates. Why? Lowering rates could fuel inflation further, which already hit a 14-month high in October. For bond investors, this is a double blow: 1.)Bond prices are unlikely to rise significantly due to stable or high interest rates; 2.)Higher inflation reduces the real value of returns from bonds, making them less appealing. Not to forget, foreign investors have already sold $2.7 billion worth of Indian stocks in November. It’s not all bad news, though. India’s inclusion in global bond indices like JPMorgan’s & upcoming additions by Bloomberg & FTSE Russell signal long-term confidence in the country’s financial system. Mitesh Shah Ajay Sampath Aravinda Subramanyam Chanchal Agarwal Krishnaprasad Ramanathan Neha Joshi, CA Nitesh Arora ✍: Hetvi Modi Bhurat #BondMarket #ForeignInvestors #IndianBonds #FinancialMarkets #FARBonds #EmergingMarkets #InterestRates #USBonds #Inflation #RBI #BondYields (Image Source: Bloomberg)