11.7.2017
"You only have to do a very few
things right in your life so long as you don't do too many things wrong" - Warren Buffett
Contrary to expectations markets are
scaling new highs. Nifty is clearly heading towards five figure mark. Indices
are trading around 19 times to one year forward PE. Where the markets will go
from here – who can guess?
GST has been rolled out and contrary
to fears markets have given thumps up to its roll out. GST was being shown as
next big disruption to growth after demonetisation. But we have seen post
demonetisation companies are reporting better sales figures. And same is likely
to happen on implementation of GST. Though on ground manufacturing activity
seemed to have taken some pause but June had witnessed flurry of sale offers in
the name of clearing stocks before implementation of GST. This is going to reflect
positively in companies’ balance sheets.
Post GST many companies especially
from FMCG and auto segment have announced reduction in their prices. Others
will follow suit. Implementation of GST will smoothen transportation system and
thus reducing transportation cost of the products. It will bring a lot of
unreported transactions to the books thereby reporting of better corporate results.
Along-with positive sentiments flush of
liquidity has also been a major cause for this continuous rise in the indices.
In first half of this calendar year equity markets have received around 1.3
lacs crores. SIPs of mutual fund alone contribute 8,500 crores every month to
the equity markets. Even we, at InvestmentMitra, have seen it ourselves.
In first 1.5 years of our operations we could hardly boast of our SIP book of
around 6 lacs a month. But in last about 6 months it has more than tripled and
is now over 20 lacs a month. What is more interesting is our HNI investors who till
now were considering SIPs to be a poor man’s tool to save some money, have realized
it’s benefits and have started investing big sums through SIPs. We won’t be
surprised if our SIP book crosses one crore mark this fiscal.
No one can guess when the markets have
peaked and when they will bottom out. We can address the issue to good extent
only by using prudent asset allocation between equity and other asset classes.
There are various schemes from good mutual fund houses where fund manager do
this asset allocation and rebalancing by himself. During such uncertain times
investors will be better off using such schemes that increases or decreases
their exposure to equity markets by tracking their price to earnings ratio or
price to book value ration or such other methods.
To know which of these funds will suit
your portfolio for Lumpsum investments or SIP portfolio, call us and we would
be very happy to assist you in taking decision.
Happy investing!
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