Everybody, his aunt and her poodle has a view on the market. So experts who have NEVER invested in the markets, to people who have 99% of their net worth in the market are now saying what to do.
- Market is at an all time high (fact)
- From an all time high, market can only go down (hilarious)
- This is a liquidity driven rally (fact, all markets are driven by money, right?)
- If you are a new investor you should book your profits (complete bull shit)
- You should play safe by Trading FnO rather than investing (its a dealer on the other side, and loves activity)
- Markets are not backed by EPS (either prices or earnings, one will always be ahead of the other)
- If EPS does not increase, prices will fall (motherhood statement, completely useless gyan)
- Liquidity driven rallies can crash any time (awww….another amazing bull shit)
So what should the retail investor do in such a market. I think the following advice is eternal:
- Take a deep breath, and brace yourself for lesser returns going forward.
- If you have got 20% return in your equity SIP, be ready for 2% returns.
- Remember the long term return on equity fund expectations should be around 12-14%
- Regression to mean and standard deviation are worth learning, if you do not know
- If your GOAL is 7 years or more, equity is the place to be in.
- If you are afraid of equity, do your SIP in funds with 65% equity, at least the debt portion is also tax free
- Understand that asset allocation is an INVESTOR prerogative, and your advisor has very little role to play.
Let me tell you the kind of questions that I am asked, and I have no competence to answer:
- Sir I have done Rs.2oL investments in equity funds, it is worth Rs 28L should I use that amount to make a down payment to buy a flat?
- Sir I have Rs. 45L in equity funds, and now I have Rs. 4L more to invest, should I invest in such high markets?
- Should I sell all my equities, shift to a debt fund and wait for the PE of the market to come down?
- If interest rates are at their bottom should I withdraw from debt funds?
- If equity markets are at their top, and interest rates are at their nadir, what should I do with my money?
- Should I withdraw from my equity (debt) funds to repay my housing loan?
- This is my investment portfolio, is it ok?
Well each of these questions have an answer which takes me half a day to answer. Before answering this question, I need to ask 20 other questions, and then and only then can I attempt to give you a CONFUSING answer with a caveat and a maybe. Not worth our time, right?
Repeating: My circle of competence is very small unlike many other people I know.
Post Footer automatically generated by Add Post Footer Plugin for wordpress.