The NIFTY in 2016

A little over a year ago, I published predicting Indian stock market returns based on historical analysis of the NIFTY and the CNX500. I did this with tongue firmly in cheek, given the very concept of value investing accepts inherent unpredictability of markets, especially in the short-term (anything less than five years) as laid out in my calm investing principles. “Anyone who says they know where the market will be a week / month / year from now is guessing (or has super powers)…“ Since I am yet to find evidence of my super powers, except for my ability to order the best thing on any restaurant

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4 charts that sum up Indian equity markets in FY2015

India Share Market in FY2015 In FY2015, India share market were propped up by a combination of a decisive political majority, lowering inflation from falling crude prices and persistently low interest rates in the developed world Apart from commodity sectors like Oil & Gas and Metals, all other sectors and sub-indices have provided positive returns this past year However, Earnings growth, the key driver of share prices, has remained elusive as shown by the 20% increase in Nifty PE explaining most of the 24% rise in the index. We’ve seen in a previous post, current PE has some impact on returns A broad-based

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The investment strategy that beats the average investor – II

In Part I of this two-part post, I made the case for low cost passive indexing as an effective means of long-term wealth building. So much so that even Buffett has recommended it to his heirs in his 2013 letter to shareholders: “My advice to the trustee couldn’t be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard’s.) I believe the trust’s long-term results from this policy will be superior to those attained by most investors — whether pension funds, institutions or individuals — who employ high-fee

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Three questions that could determine your financial future

Try this quick quiz: Question 1: Suppose you had ₹100 in your savings account today and the interest rate is 8% per year. After five years, how much do you think you would have in the account if you left the money untouched? A] More than ₹108                    B] Exactly ₹108                  C] Less than ₹108 Question 2: Imagine that the interest rate on your savings account was 8% per year and inflation was 9% per year. After one year, how much would you be able to buy with the

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