Best asset class for 1-3 years…
In my recent travels many people asked me…
1. Should I buy more gold? Experts are telling me it will give 25% return in one year.
2. I earned 20% return on a Non Convertible debenture…should I put more money in that?
3. I am 70 years of age – should I sell ALL my equities and shift to debt?
My answer to all the 3 questions remained the same. I need much, much more data than just this question to be able to answer these questions.
So here is an attempt:
If your view is ONE YEAR and you want to be in EQUITIES – invest 25% of your money and wait for the European crisis to be closer to a solution. We are nowhere near the solution. If the market goes to 4800 (nifty), invest at least 50% of the corpus..at 4500 invest all your money.
If you have a THREE year view, invest 50% and wait …be ready to invest on the way up or down..and quickly.
If you have a FIVE year view, rest assured this is the best asset class. You will see at least 25000 sensex before 2016. Not a bad return from 17500 (sensex).
rarely do i stick my neck out…but here it is!
Roshan
Atlast Subra Sir has given a crisp clear guidline for investing, contrary to his style of “Samajhne waale samajh gaye, jo na samjhe woh anari hai”
Thanks from the many “anaris” like me here 🙂
Brijesh
If 17.5K today in sensex reaches 25k on Nov 2016, it’s a IRR of only 7.3 ….. very nominal return … less than todays inflation ..
Dheeraj
Hi all, which MF we should buy assuming interest rates are almost peaked.. Please help..
Dheeraj
Strange.. No reply from anyone…
anon
Thank you for this.
And I salute you for putting your opinion in black and white.
Jitendra
Subra,
A very good blog…am tempted to create 3 buckets with 1,3,5 year planning…and I will do that for sure 🙂
Jitendra
Subra,
One question though, how someone should arrive at ‘Investable Amount’??? a rough idea would do for me 🙂
Sreekant
Dheeraj, predicting interest rates is very difficult. It is said that you should predict either the rate or the date. Never both. Just when everybody thought rates had peaked, the govt. dropped the excess borrowings bomb causing bond yields to spike due to the sheer excess supply.
But just in case you have a gut feeling that rates have peaked out and have a horizon of about 3 years or more you can look at long term bond funds or gilt funds as they perform well in a falling interest rate scenario (in response to the economy slowing down), though such funds have a high expense ratio in the range of 1.5%. But if the rates by any chance move in the opposite direction, you should be ready to bear the negative returns that these may produce.
Dheeraj
Thanks a lot Sreekant..
Ravinder Makhaik
Ha Ha Ha, 🙂 you have dared to stick your neck out in this one.
Times are a change’in