No major returns from Indian stocks for next 1 yr

Global markets are jostling with uncertainty and in such an environment stock selection will be more important than index investing, MARC FABER, editor and publisher of 'The Gloom, Boom & Doom Report', told Puneet Wadhwa in a telephonic conversation. Indices may underperform but picking the right stocks can still yield good returns, he said. Edited excerpts:

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How do you think Donald Trump's tariff agenda has played out in recent weeks? Are global markets in for more surprises?

The dollar has weakened this year against foreign currencies, especially the yen and Swiss franc, and also against precious metals. Tariffs are certainly not favourable for the US dollar. Whether the decline is directly because of tariffs or other reasons is debatable, but tariffs certainly don't help.

As for surprises, yes, we should expect many. (Donald) Trump takes decisions without fully considering the consequences and then reverses them, depending on what his advisers or wealthy donors suggest. This creates increased market volatility. Just look at Tesla's stock, which dropped 63 per cent between December and early April, then rallied by nearly 40 per cent.

Do you think there is more volatility ahead for global markets?

Yes, the global markets will remain volatile. Trump's unpredictable decision-making and constant reversals — driven by shifting influences — lead to a lot of market volatility.

How do you think the US Federal Reserve will respond in six to 12 months?