Indian Stock Market and Mutual Funds

Neotheone said:

I worry that well before the shift plays out fully, the empire would do everything it can, including staging coups, or going to wars, to keep the dollar supremacy intact. There are already signs of commodity price and precious metals price manipulation by western establishment, although such things probably never will be proved.

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Dollar Milkshake theory:

Whatever others do, value will precipitate towards US$, that is the plan.

edit: A very interesting further read:

TEUser2K1 said:

India’s looming financial crisis
The country presents a textbook example of the key elements that signal an emerging calamity

India’s looming financial crisis

India’s heavily credit-reliant economic strategy is akin to a car speeding toward a cliff’s edge without brakes

www.thehindu.com

why such an article, this looks so confusing considering market is going okayish...

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This article is basing the pessimism on what has and is happening in China where again a lot of the debt came from housing and infrastructure.

The equity market, especially the secondary one, is basically a zero-sum game that is not creating economic value but just circulating it within a section of society (and foreign investors) that can afford to do so.

At the end of the day, it comes down to how inclusive any growth is and India is presently not doing so good on that front.

letmein said:

In an ideal world, SEBI would be taking action against him for providing investment advice without a license.

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also idiots like Warikoo and Shrivastav would have been fined heavily for shilling whoever sponsors them, and peeps would realise they are nothing but scammers

anmolbhard004 said:

this thread is related to discussion related to share market and mutual funds

people can also share their share market and mutual funds portfolio so that we can discuss it and make the correct choices.

my mf portfolio is as follow

10k in hdfc bse index 50 mutual fund
10k in parag parikh flexi cap
5k in nippon india small cap
5k in motilal mid cap. 30K per month

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I'm pretty late to this thread and not sure if you have changed your mf spread but this is way too over-diversified, flexi cap is just majorly large/mid cap with very minimal small cap exposure, if your risk appetite is great, I would instead suggest to drop the midcap and go all in on small cap and if its not that great, then drop both the mid and small and invest in flexi, your sip is too low for the number of mfs you have, your returns would be lower in the current spread, generally its better to only invest in a couple of mfs and at most three imo

altair21 said:

also idiots like Warikoo and Shrivastav would have been fined heavily for shilling whoever sponsors them, and peeps would realise they are nothing but scammers

I'm pretty late to this thread and not sure if you have changed your mf spread but this is way too over-diversified, flexi cap is just majorly large/mid cap with very minimal small cap exposure, if your risk appetite is great, I would instead suggest to drop the midcap and go all in on small cap and if its not that great, then drop both the mid and small and invest in flexi, your sip is too low for the number of mfs you have, your returns would be lower in the current spread, generally its better to only invest in a couple of mfs and at most three imo

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No reason to take extra risk in smallcaps just because they happen to be going up today. All of these things are cyclical. Before covid they were struggling. Then people were crazy about quality and value/psu/midcaps were shit.
Bull markets can last, but there is a bit of a mania in smallcaps right now. When markets crash, smallcaps tend to capitulate to the extreme. People tend to chase whatever has worked very well in recent past and usually it ends badly for them in the long run.

anmolbhard004 said:

should I keep investing in hdfc bse index?

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depends on what kind of returns you are getting, and whats the fund allocation like but index funds are a pretty safe bet even during downturns, I dont have much knowledge about this fund thats why I didnt comment on it,

anmolbhard004 said:

should I keep investing in hdfc bse index?

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After having a look at this graph, I think you should not:

Is this fund under-performing BSE Sensex consistently ? (if the fund selected in graph is not correct you can change those and come to your own conclusions).

would say the same ^^ but would recommend to research on your own, I dont like to give out definites because I'm not nearly qualified enough for it

anmolbhard004 said:

actually that portfolio is mainly of mother I am mainly into investing into some stocks and other things .
She just wants one thing better returns than her BANK FDs.
thanks for pointing this out this is underperforming and I should stop it now.

I need a clear idea to invest in which MF , people say if you dont have time to research stocks just invest in MFs but it seems they also need a bit research.
@altair21

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if getting better returns than FD is the goal than honestly any decent MF will do but honestly you do need to put in the time and I'm not saying like 3-4 hours every day but its a one time thing. your current choices (except for BSE) are good, its just you are overdiversifed at this point, and like I said before, best would be consolidation based on your risk appetite, either drop the midcap and go all in on small or drop mid and small and go all in on flexi, and shift your bse (leave the amount invested, dont redeem imo) to a nifty 50 index, I use ICICI prudential for it

Also this guide is golden (https://www.indiainvestments.wiki/), dont follow it blindly but it will explain all the steps to you,

@anmolbhard004
Generally found https://www.youtube.com/@InvestYadnya helpful in deciding mutual funds, they seems to be focused at it https://investyadnya.in/
The Fund-O-Meter section on their website help analyses mutual fund performance, etc.
For eg., hints on when to re-balance: Currently, many feel that market is reaching the peak, there are elections in lot of countries all over the world and all the chinks in the system will be exposed after elections (mainly in USA). So, taking small SIPs first and when market goes down a lot investing more will be good idea. Meanwhile, as a hedge on inflation and volatility, invest in gold / SGBs. FD rates currently is good, without any risks too.

TEUser2K1 said:

Generally found https://www.youtube.com/@InvestYadnya helpful in deciding mutual funds, they seems to be focused at it https://investyadnya.in/
The Fund-O-Meter section on their website help analyses mutual fund performance, etc.

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not a good idea to track MFs by monthly performance, there are other metrics you need to be aware of, like expense ratio, exit load, alpha, beta etc are better indicators

altair21 said:

not a good idea to track MFs by monthly performance

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I didn't mention monthly performance, such tools for eg., https://www.thefundoo.com/ help analyze overall performance and comparison.

Tracer_Bullet said:

No reason to take extra risk in smallcaps just because they happen to be going up today. All of these things are cyclical. Before covid they were struggling. Then people were crazy about quality and value/psu/midcaps were shit.

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I did say risk appetite, and anyone investing in mfs for short term gains is an idiot, mfs are a long term instrument and should be treated as such

altair21 said:

I did say risk appetite, and anyone investing in mfs for short term gains is an idiot, mfs are a long term instrument and should be treated as such

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In ideal conditions, right approach about long term focused funds.
However, wondering about somebody who got exceptional gains in small cap mutual funds in short term and concerned about a possible big volatility in the market. Exiting market with good profit margin is also a serious aspect of investing.

altair21 said:

I did say risk appetite, and anyone investing in mfs for short term gains is an idiot, mfs are a long term instrument and should be treated as such

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yet one gets swayed by short term exceptional gains. That is the only reason to invest in small caps, generally they have not outperformed midcaps in long run and have had crushing drawdowns.
Its very easy to say long term when things are looking good. And very easy to select what is working today as the right thing to do for long term as past numbers will look good, even long term.

Anyway, i made my point. Best to look at that article and maybe do ones own research. Good luck.

Tracer_Bullet said:

yet one gets swayed by short term exceptional gains. That is the only reason to invest in small caps, generally they have not outperformed midcaps in long run and have had crushing drawdowns.
Its very easy to say long term when things are looking good. And very easy to select what is working today as the right thing to do for long term as past numbers will look good, even long term.

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if we went by your logic, one might as well not even invest in mutual funds, there's always a risk in every fund, even bluechip stock, peeps have varying risk appetites and varying preferences for their porfolio split.

And you sound really naive if you think small cap funds are only for "short term" gains and even more naive if you are gonna judge future performance with past returns

TEUser2K1 said:

In ideal conditions, right approach about long term focused funds.
However, wondering about somebody who got exceptional gains in small cap mutual funds in short term and concerned about a possible big volatility in the market. Exiting market with good profit margin is also a serious aspect of investing.

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again, MFs are not the instrument for you if you are concerned about short term volatility, the minimum time horizon that one must invest in a MF is atleast a decade for any decent returns, bull and bear markets come and go and all the gains and losses get averaged out over long term. if you are really so concerned about volatility, invest in a blue chip fund or better yet just FDs, mutual funds are not for you

altair21 said:

if we went by your logic, one might as well not even invest in mutual funds, there's always a risk in every fund, even bluechip stock, peeps have varying risk appetites and varying preferences for their porfolio split.

And you sound really naive if you think small cap funds are only for "short term" gains and even more naive if you are gonna judge future performance with past returns

again, MFs are not the instrument for you if you are concerned about short term volatility, the minimum time horizon that one must invest in a MF is atleast a decade for any decent returns, bull and bear markets come and go and all the gains and losses get averaged out over long term. if you are really so concerned about volatility, invest in a blue chip fund or better yet just FDs, mutual funds are not for you

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No need to get antsy. Recency bias is a strong thing. All reasoning gets aligned to justify whatever is working right now with risks getting ignored. And when real crashes and extended difficult periods with continuous bad news happens then the opposite happens. Its easy to call it just volatility, much different to live through it. And future is uncertain. Permanent damage is very much possible too. Look at JM core 11.

I trade in markets for a living, i have invested in Mutual funds for 15 or so years too. Have seen ups and downs. In all of my investing time, small caps never made sense as midcaps gave similar returns with lower risk. And unless one is playing momentum and knows when to get out, its not a great idea to go after whatever is very hot right now.

Here is what a very established fund manager says. They can look foolish in short term, but eventually this plays out more often than not.

Anyway, good luck to you.

Tracer_Bullet said:

No need to get antsy. Recency bias is a strong thing. All reasoning gets aligned to justify whatever is working right now with risks getting ignored. And when real crashes and extended difficult periods with continuous bad news happens then the opposite happens. Its easy to call it just volatility, much different to live through it. And future is uncertain. Permanent damage is very much possible too. Look at JM core 11.

I trade in markets for a living, i have invested in Mutual funds for 15 or so years too. Have seen ups and downs. In all of my investing time, small caps never made sense as midcaps gave similar returns with lower risk. And unless one is playing momentum and knows when to get out, its not a great idea to go after whatever is very hot right now.

Here is what a very established fund manager says. They can look foolish in short term, but eventually this plays out more often than not.

ICICI Prudential's S Naren suggests cutting allocation to small and midcap stocks in 2023 - CNBC TV18

Naren's perspective highlights the importance of strategic asset allocation in investing. His advice to reduce allocation to small and mid-cap stocks in 2023 may challenge the current trend, but he believes it will lead to better long-term returns, echoing the actions of market insiders who are...

www.cnbctv18.com

Anyway, good luck to you.

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what would you recommend then?

altair21 said:

what would you recommend then?

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Risk taking might depend on the person. I think that for most people without proven expertise its probably best to keep it simple and invest in diversified market without trying to pick things ( usually whats hot right now) or to try and time entry/exit..

I don't have funds recommendations. Right now i am actually 0% equity because of trading which is where my focus is.

Simple index funds should be enough for all. So pick your poison, maybe have some allocation to Large / next 50 / mid caps, Don't have to invest in all.
There is a lot of future uncertainty, things keep changing. Have some kind of allocation plan between different assets.

This is difficult, but if you feel confident about someone with good long term record, then can take active funds too.
Naren is good, Prashant jain is also good ( he looked foolish when we was buying psus some years back and his funds were struggling with everyone wanting quality stocks). Jain left HDFC.
I don't know about others.

So yeah, some simple diversified funds covering decent portion of the market, ignore small caps - esp today, try to manage allocation, move from whats very hot to other things if possible.
Can consider debt funds too as part of allocation for short/medium term needs and if needed to reduce volatility. 10y gilt/ gold can have negative correlation with equity too ( but i haven't tested this ).
Perhaps funds holding foreign equity.

Then just hold for longer term / continue SIPs. When tough times come, one gets really tested. For diversified funds, one can simply hold and if possible add more. Best times to invest has been during crashes and when past returns are poor ( ex 5year equity return less than FD). But dont expect markets to not crash further or to give immediate returns.

And then just focus on career instead of investing/trading stuff. Try to be more balanced, good times end and so do bad times.