Skip to main content

"Cash combined with courage in a time of crisis is priceless." - Warren Buffett

Image
By

In May 2017, at InvestmentMitra we advised caution on lumpsum investments into equity. In our communication Is Stock Market History Repeating we had found similarity in pattern that developed during August 2007 & January 2008. It repeated, with markets giving good returns against high valuation and then falling freely on introduction of long term capital gains tax on equity.

Since then it is almost three years and we at InvestmentMitra always took cautious approach while investing even for long term by investing money majorly in balance advantage and balanced funds. All thorugh this period it was only in October 2018, March &  August 2019 we found equity markets to be little attractive with advising profit booking in April 2019 when markets spiked too fast with no support from fundamentals.

In our communication Green Shoots in Economy & Coronavirus – Should you invest in Equity  on 16th February, we talked of possibility of Coranavirus turning out to be a Black Swan event and cautioned you against investing into equity. We cautioned you again in our communication on 24th February. In our communication of 1st March, we advised you to start looking at your portfolio and scope of rebalancing by moving investments from other asset classes to equity.

Over long term, equity as an asset class outperforms all other asset classes, this is a proven fact. But it is impossible to predict markets perfectly for anybody in the world. We only study fundamentals and apply our logics to decide whether we should go all out in equity now or take cautious approach for the time being. At InvestmentMitra we had always been very conservative while advising investments to our investors as we find ourselves incapable in chasing the best returns. But now we strongly believe that it is time to be aggressive.

Has everything come under control – NO.

Will markets will not fall further from here – We don’t know

What we know is that presently markets are attractively valued and you should put at least 60% of your long term funds at these levels. If market goes down further you have another 40% to take advantage of and if markets stabilizes around current levels, you can start increasing exposure to equity on confirmation of consolidation.

"There are two concepts we can hold to with confidence:- Rule No.1 : Most things will prove to be cyclical. Rule No.2: Some of the greatest opportunities for gain and loss come when other people forget Rule No.1"-Howard Marks

Please post your comments on our blog or you may email us your views or query on ajay@investmentmitra.com or whatsapp on 9958447700.

Happy Investing!

Team InvestmentMitra

Comments

Post a Comment

Popular posts from this blog

This Republic Day Write Your Own Financial Constitution

By
“Constitution is not mere a lawyer’s document, it is a vehicle of life and its spirit is always the spirit of Age” – BR Ambedkar A constitution primarily is a document that details the rights, obligations, privileges, duties and responsibilities of the people living within the corridors of, and leading that country. It details the rule of governance. Without a constitution it will be difficult to live like a civilised society. We would be living like in stone-age where “Might was Right” and jungle raj prevailed all over. Like a country, each individual should also have his or his family’s own financial constitution detailing various financial objectives and the process to achieve those financial objectives, rules that will govern the way its finances will be managed etc. This applies to all individuals without exception and is more popularly known as “Financial Plan”. Like a constitution your financial plan should have a Preamble and different schedules. Preamble -...
Post a Comment
Read more

Time or Timing – What is more important with Sensex @ 64K

By
  The Stock Market is the device to transfer wealth from the IMPATIENT to the PATIENT. After swinging in a range for almost one and half years, markets breached their previous peaks and are scaling new one now. Markets have risen by almost over 14% in last three months. Major reason for this sudden rise is the return of FIIs to the Indian stock markets following the fact that India is the fastest growing economy and growing over 6% despite covid, global economic slowdown and geo-political tensions. We invest for long term and everyone knows in the long run markets will go up irrespective of intermittent shocks like scams, dot-com bubble, Lehman crisis, covid or banking troubles in USA etc. Following picture depict the journey of Sensex over 40 years since its inception.   Source; www.thenwsmen.co.in The unfortunate part is we are more concerned about the short term movements of the markets. Every time there is sudden rise or fall in them market we are gripped more by f...
Post a Comment
Read more

On Cross Roads

By
“We cannot truly plan, because we do not understand the future- but this is not necessarily a bad news. We could plan while bearing in mind such limitations. It just take guts.”- Taleb:   Propounder of The Black Swan theory. Pessimism that set in March, still persists in our minds. In fact it has deepened with growing number of Covid cases being reported. The largest question ruling our minds today is - Shall we ever be able to overcome it…………..     and if yes by when and how? Have we ever wondered how have the Indian culture survived for so many thousands of years, how come so many Indians who were transported as labourers to many African and European countries centuries ago are now ruling the roost or how come most of the top 20 firms in the world have Indian heading them and so on……….. The only reason to above and many such questions is our “ Ability to Adapt ”. We are fast learner and very quickly adapt to new situation. Indians enjoys six different we...
3 comments
Read more

Markets Tumbling, Recovering – What to do??

By
Markets Tumbling, Recovering – What to do?? "The best time to plant a tree was 20 years ago. The second best time is now." - Chinese proverb. In times like present most people flock towards safety. Most do it because they don’t know how long this doomsday atmosphere will last, some even feeling like there will be No Tomorrow. But hunger for good returns on our investment never ceases. Kin Hubbard satires, "The safest way to double your money is to fold it over and put it in your pocket." On investment and earning good money from them, Warren Buffet – the legendary investor says, "If I buy a farm, I don't know whether there's going to be drought next year, but I know that there are not going to be 20 straight years of drought, and I know there's not going to be 20 straight years of great rainfall." It is a proven fact that no matter what, in long term best returns come from stock markets only. And as Seth Klarman says, “The stock mar...
1 comment
Read more

Have You Missed Boarding the Bus

By
  "The market does not trade upon what everybody knows, but upon what those with the best information can foresee" – William Hamilton Russia-Ukraine conflict had clouded the stock markets worldwide giving speculations to the talks like possibilities of third world war, Russia heading for deep financial crisis, energy crisis looming large over Europe etc. With Russia-Ukraine conflict seems getting settled and much to the pleasure of Russia – the Super Power, this has now become a non-player for the markets until some significant deviation happens from the present stance taken by all major countries of the world. Present is the world of instant. We want everything instant and so are our reactions. In the age of internetted social life, dissemination of information is highly fluid. And over 99% of these netizens have mastered the art of forwarding such information without verifying if it’s a news, noise or manipulated agenda of some interested parties.   Most economies in...
1 comment
Read more