Markets after FY2018: Bull or Bear

FY2018 was an ok year for Indian markets. The statement seems strange given what has been happening since late January. In spite of the correction over the last two months, we still ended the year up 10%+ on both the NIFTY and the NSE 500. Not quite the blockbuster returns we saw in Jan 2018 when both indices were at 20%+ returns for the financial year and certain individual stocks were giving double-digit returns in a matter of days. Things were so good that a random selection of stocks would have done fairly well over the last year [Read this before deciding

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Markets this quarter

Only three sub-indices (IT, Healthcare and Consumer Durables) ended up on Sep 30th compared to where they were on July 1st. Metals lost over 25% while Capital Goods and PSUs lost over 14%. Easily one of the worst quarters for Indian markets since the excitement of a new government at the center in early 2014. Call it turmoil in China and the devaluation of the yuan or the Fed and the spectre of rate hikes or key legislation stalling in the Rajya Sabha, this quarter saw one of the steepest one-day fall in six years in the Indian stock market.

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The case for long term equity investing in three charts

Using Nifty data from 1999 to 2015, here are three charts that make a strong case for long term equity investing in Indian equities. 1. Longer the holding period, higher the aggregate returns Holding stocks for under a year is not very lucrative, and holding for five years lets you almost double your money. Note how holding for another five years after that more than triples your money. All hail the power of compounding 2. Longer the holding period, lower the volatility Chart 1 shows the absolute return which predictably goes up with increasing holding period. However, with increasing holding period, the uncertainty

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My three biggest investment mistakes

I have a recurring quarterly google calendar reminder to look at my personal finances and take action where required. This means checking whether I have too much or too little liquidity, making investment allocation decisions around parking money in liquid funds versus deploying in the stock market and finally, a check on the components of my stock portfolio and whether it needs any tinkering. With not much “tinkering” to do the last time, I spent time taking stock of my portfolio performance starting back in 2006. I focused on what went well and also went spectacularly wrong. Thankfully I had more of the former,

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