Since our last review in February 2019, even though the elections are behind us, the market scenario has not improved at all and has in fact deteriorated. The markets are not likely to recover fast and would probably take another 6-9 months to improve.
Looking at all the asset classes –
Gold after 7 years, has finally started giving some return and its near term trend is likely to remain upward.
Property prices in major cities seem to have bottomed out but there is hardly any uptick.
Debt is also going through a tough patch – Bank/Corporate FD rates are going down and even long term debt mutual funds are under-performing.
Equity has had a bad year. Over the last 12 months –
Sensex is -4.27%
Nifty is -6.36%
Midcap index is -21.8%
Small cap index is -29.26%
Even though Nifty/Sensex seem to be high, they do not reflect the true picture at all. Only a handful of stocks have kept the Nifty/Sensex at these levels. If you consider the rest of the stocks, Nifty is already around 9,000 level and Sensex at 30,000 level (Refer SMFS email dated 2nd August).
This is the time when you have to be patient and keep in mind that you are investing for the long term based on your goals and the sound principles of asset allocation (not on short term market scenarios). Equity is still the best asset class for long term time horizons. So please continue with your SIPs (Refer SMFS email dated 23rd August).
For any lump sum investments, we recommend doing a Liquid to Equity, weekly systematic transfer plan over the next 6-9 months.
But above all, just stick with your Asset Allocation and do not get swayed by the negative market sentiments into any knee jerk reactions.
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