This time is
different!! Its indeed different time
While writing this note, all major indices are negative
except for the Banking and Financials. They have corrected substantially from intraday
peak!! This has a lot to say about the market mood!!
Despite the greater and
timely response from the RBI, the market is unwilling to cheer!!
“Market is collective opinion of many investors” which means
market is still sceptical about the future outlook. Respect market opinion at
the moment. Some people are trying to do bottom fishing and some are trying to
trade in market. Like I always mentioned trading is job of professionals and is
double edged sword. Don’t you start trading, chances are that you will not make
quick money (rather make quick losses).
As I mentioned in my earlier blog, “CASH IS KING”. The view
further strengthens. I still feel systematic Investing is the way to go.
Lumpsum, if at all, should be considered in Asset allocation funds or Multi
Asset funds.
Currently all eyes are on Equity Market, but Debt market
also has great value to offer. At the time of writing, 6.46% G-Sec is trading
at yield of 6.09%, down by roughly 20 bps in two days.
Investor with low risk appetite and who are typical FD type
investor should consider the Debt fund. As I always mentioned, please check
which category of debt fund you are investing in. There are MF schemes which
are volatile and safe like FDs also. So selection of scheme is more important. Best
is to check with your advisor!! Investing in Debt funds offers good cushion and
decent downside protection to overall portfolio. Wise investor invests for stability and consistency and not returns
alone. Risk is high at the moment and we are not aware of how much risk can
come from which side!!
As I mentioned in earlier blogs and TV shows, that sector
wise, I liked Healthcare, Consumption and Infrastructure. While Infra hasn’t done
good, Healthcare and Consumption has been good value protector in this mayhem.
They will continue to do well in recovery mode also👍 .
Hereon, Largecap, Large & Midcap and Multicap Mutual Funds
are expected to do well. Small caps might look attractive but are to be avoided
at the moment. Economic situation is worsening hence there will be more
casualties on Smallcap space. If you are stock investor, be careful while
investing in Smallcap (and Midcap). It might look cheap but may turn out to be
expensive buy😒.
Value buy could be value trap.
I would also urge all investors to take help of a good
advisor while investing. Don’t dare doing it yourself. This time is different
as this is unique crisis (worldwide health crisis with uncertain period of
lockdown) and not sector or country specific crisis. If you use this crisis
well, you can make handsome returns otherwise you will lose opportunity and
capital both🙏. If you don’t have good Advisor/ Relationship
Manager/ Wealth Manager or he/she is not smart enough to gauge situation,
quickly look for good advisor.
If you are fully invested in equity and have suffered mark
to market loss of equal or more than the index, do not panic. A good advisor
will help you navigate thru this tough water. Good advisor can do health check and
impact analysis of existing portfolio and draw a plan for future. If you don’t have
good advisor or can’t find, do not do any adventure!! Just stay put.
In case you are stuck on what to do and how to do? Please feel free to
speak to me on 9833778887 or write to me at wealthcarein@gmail.com. I
will be happy to help you without obligation.
If you find our blogs helpful, please do like, share and
comment
Author –
Bhavesh
D Damania
Founder
- Wealthcare Investments
EduPrenuer,
TV show panellist and Blogger
"Risk comes until you know what, where and why you are Investing"
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