Market Updates and Investment Strategies.
Sensex and Nifty are touching new highs, then we question ourselves whether these numbers are well supported by fundamentals.
Nifty50 earnings have improved from 400 to 1050; which means earnings have improved over 2.5 times.
Inflation number is less than 5% .
10 year G Sec yield is at 6.98℅ which is almost at the same level where it was last month. We expect yield will move downward over next 1 year.
Similarly IIP, CAD, PMI, Fiscal Deficit etc are provinding support to the market rally.
These numbers give us comfort; i.e. market rally is not being irrational but has fundamentals supporting it.
Still as always I reiterate my believe on traditional investment strategies, that is maket scenarios are subjective and keep changing but the key of success in investment is to have long-term asset allocation and to keep our basics right.
Market conditions are useful only upto taking positiin in a tactical part of portfolio (which is a very small portion of individual portfolio).
Whenever we interct with you, our focus is on constructing a well-balanced investment portfolio given your requirement and risk profile.
1. Diversification:
Diversify across asset classes to manage risk. A balanced portfolio typically includes equities, debt, and other instruments.
Equities can provide growth potential, while debt offers stability.
2. Equity Allocation:
Allocate a portion of your portfolio to equities. Despite market volatility, they tend to outperform other asset classes over the long term.
Consider allocating large-cap, mid-cap, and small-cap funds (depending upon market scenario at the time of initial investment) for diversification.
3. Hybrid and fixed-income scheme Allocation:
Include Hybrid and fixed-income schemes like BAF, fixed deposits, or traditional guaranteed schemes. These provide relatively steady returns and act as a cushion during market downturns.
4. Gold and Real Estate:
Allocate a *small portion* to gold or real estate for diversification.
Gold acts as a hedge against inflation, while real estate provides stability.
5. Alternative Investments:
Explore alternative investments like AIFs or PMS funds.
AIFs, PMS allow us to invest in assets/strategies which can offer high returns but come with higher risk.
6. Risk Assessment:
Assess your risk tolerance. Understand how much volatility you can handle.
Adjust your asset-class mix accordingly.
Remember, market conditions can change rapidly. Regularly review and rebalance our portfolio help us better equipped to handle in case of downturns.
Investment and wealth creation process is boring but certainly very fruitful in the long term.
