Indian Stock Market and Mutual Funds

[Kaching999]

Guys Pls guide where should I make the SIP investments now

I think you should invest in something like Nifty Next 50 they have been consistently out performing Nifty50. Nifty50 and BSE Sensex perform almost identically but Nifty50 does have a slight edge as it can profit more from a growing company in comparison with Sensex. You can also look at some active funds which have been performing well such as Bank of India Mid & Small Cap Equity & Debt Fund. Also there are the ETFs such as the ICICI BHARAT 22, it is in a way similar to Nifty50 and Sensex but it is an active fund so if a company starts performing bad it can adjust much easily it has the best risk adjustment in its category, if not you can also invest in it in a form of a mutual fund as a FOF. DO NOT BLINDLY FOLLOW ANY ADVICE YOU RECEIVE ONLINE DO YOUR OWN RESEARCH AND THEN ONLY MAKE AN INVESTMENT DECISION, INVESTOR BEWARE.

 

[ibose]

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.

This could not be stated any better. In fact, it should be stickied across all the investment threads.

 

[Neotheone]

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

This is solid gold advice too. Most people will be best off investing in their own professional skillsets that makes them productive in the world. With some luck, money will follow, and you would not really need to invest except to protect your savings from inflation - which can also be done through real assets / gold.

 

[altair21]

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.

I think your approach is way too conservative but yeah I do agree with you in general, nifty 50 and nift next 50 are just largecaps in disguise, on top if you are recommending mid caps, then yeah your money will be safe but without risk there wont be much growth, and I'll repeat what I said before, dont bother investing into MFs if your time horizon isnt atleast 10 years or so.

As for investing into debt funds, there's no point at present, FD rates are on par with debt funds and are way safer an investment instrument, I have been parking my leftover money into FD's (after SIP) for the past year or so and looking into debt funds returns, FDs actually have had a small edge over them.

 

[anmolbhard004]

Guys I have invested 50k in Adani Green in dec 2023 , but it has not given me any returns as such which stock should I invest this money in now? main aim is to hold long term but to get returns as much as 10% every year min.

 

[honest1]

Guys, direct equity investments are very risky, please understand!
If you dont know about markets, please leave it to professionals and invest via Mutual Funds!
Do monthly SIP in 2-3 Mutual Funds, only check its performance once a year, if you get additional funds, invest on days where there is panic in the market.
A very very simple things to do to protect your money!

(I am assuming that this was about investments in the market, however, a proper investment plan has to made according to various parameters of an individual and accordingly the investments has to be spread across various asset classes)

 

[altair21]

Guys I have invested 50k in Adani Green in dec 2023 , but it has not given me any returns as such which stock should I invest this money in now? main aim is to hold long term but to get returns as much as 10% every year min.

dont invest in stocks period, you dont know enough and nor you have enough capital to play with stocks, stocks are for those who have spare capital they can invest and wont feel the pinch in their everyday life and also are deep into stocks analysis/keeping up with different sectors.

 

[anmolbhard004]

Guys, direct equity investments are very risky, please understand!
If you dont know about markets, please leave it to professionals and invest via Mutual Funds!
Do monthly SIP in 2-3 Mutual Funds, only check its performance once a year, if you get additional funds, invest on days where there is panic in the market.
A very very simple things to do to protect your money!

(I am assuming that this was about investments in the market, however, a proper investment plan has to made according to various parameters of an individual and accordingly the investments has to be spread across various asset classes)

its not like I do intraday trading , investing in large cap companies is mostly safe I assume [ 8-10% returns is guaranteed] I had a capital of 3L and I thought it would be better to park it in shares rather than Bank FDs.

dont invest in stocks period, you dont know enough and nor you have enough capital to play with stocks, stocks are for those who have spare capital they can invest and wont feel the pinch in their everyday life and also are deep into stocks analysis/keeping up with different sectors.

 

[altair21]

its not like I do intraday trading , investing in large cap companies is mostly safe I assume [ 8-10% returns is guaranteed] I had a capital of 3L and I thought it would be better to park it in shares rather than Bank FDs.

just do a lumpsum investment in MFs of your choice and if you are really feeling adventurous, small cases might be good for you but honestly? just pick an index fund for safety or a largecap @Tracer_Bullet 's approach is the best if safety is concerned

 

[Tracer_Bullet]

I think your approach is way too conservative but yeah I do agree with you in general, nifty 50 and nift next 50 are just largecaps in disguise, on top if you are recommending mid caps, then yeah your money will be safe but without risk there wont be much group, and I'll repeat what I said before, dont bother investing into MFs if your time horizon isnt atleast 10 years or so.

I trade. When i invest i will invest actively using my own rules.
But this is good approach for most people. They don't need to beat the market, just close to market returns will be enough to grow against inflation and then you focus on career instead of needless complexity in a domain where you don't have any tested skills.

As for investing into debt funds, there's no point at present, FD rates are on par with debt funds and are way safer an investment instrument, I have been parking my leftover money into FD's (after SIP) for the past year or so and looking into debt funds returns, FDs actually have had a small edge over them.

If in taxable bracket, we have to pay tax every year on FDs, whereas i can keep compounding in funds. For short terms needs, ok i guess or if not paying taxes.

Guys I have invested 50k in Adani Green in dec 2023 , but it has not given me any returns as such which stock should I invest this money in now? main aim is to hold long term but to get returns as much as 10% every year min.

1) Direct investing should be left to professionals IMO. If you dont know when to get out, don't get in.
2) Every year return expectation is a mistake.

its not like I do intraday trading , investing in large cap companies is mostly safe I assume [ 8-10% returns is guaranteed] I had a capital of 3L and I thought it would be better to park it in shares rather than Bank FDs.

This is bull market folly. If professional managers struggle to beat the market in largecap space, why the hell should an avg joe waste time here? Not saying we cant do it , i trade intraday too. But this is left for people who know what they are doing and are ready to spend years in obtaining those skills.

 

[rockyo27]

Guys I have invested 50k in Adani Green in dec 2023 , but it has not given me any returns as such which stock should I invest this money in now? main aim is to hold long term but to get returns as much as 10% every year min.

Green tech is not so much going now. All is just hype until something good comes in there.
As of now power sector is buzzing. So check power sector companies along with those manufacturing parts and thereof for them as there is shortages for them. But do your own research if you invest in stocks directly.

 

[honest1]

its not like I do intraday trading , investing in large cap companies is mostly safe I assume [ 8-10% returns is guaranteed] I had a capital of 3L and I thought it would be better to park it in shares rather than Bank FDs.

I would like to differ. Taking direct exposure in one particular stock, even though its a large cap is risky. Assuming that these gives 8-10% returns a year is also an assumption and may or may not happen and since the investment is concentrated in one stock, that stock might not perform at all.
Reliance didnt gave any returns for whole 10 years! Can you believe?

So, my humble request is to take the MF route and if not, simply take ETFs.

 

[TEUser2K1]

Green tech is not so much going now.

Adani is investing hugely in solar panel deployments, green tech and blue hydrogen, etc. is still being implemented. Problem is that their companies have huge debt, also have political and macro-economic dependency since those are huge infra verticals.

@anmolbhard004
Thing is stock market runs on hypes, news and rumors, Adani stocks had their time, now things will fluctuate.

From your comments, looks like you are a professional in some field, but likes to learn and hobby tinker about things on the sidelines.
This requires lot of time and learning. smallcase.com which is affiliated to demat service providers helps with that 'itch'.

When matters regarding investments are considered, if you want to do big investments, find a trustworthy professional advisor as everyone mentions (the boaring statutory comment, but it really make sense). Even then do your due diligence.

For Individual level management, invest in MFs both lumpsum and SIP, will require some self studies to select right one.
Rest of investments you can do in FDs / Post office deposits / PPF, physical gold / SGBs, select equities, etc.

As for Adani Green, if you feel it is making less value, why not sell and invest that money in some other stocks with momentum ?
It looks like you are still in nominal profit in this share ? You can keep bank FD rates & / nifty index returns as a benchmark to assess the yield ?

 

[dpandey]

investing in large cap companies is mostly safe I assume [ 8-10% returns is guaranteed]

Any instrument that guarantees return will gets priced like a bond.

Equity is different in that you are betting on humans. When you buy Adani shares, you are betting on Gautam Adani's ability to navigate the muddy waters of politics and finance. With humans, unlike with commodities or bonds, there is no 'guarantee'. E.g. MSFT share price has gone up 10 times since Nadella took over. Which 'value investor' (or pick your favorite strategy) would have guessed that in 2014? I for one thought that MSFT was going down and they wanted a brown fall guy to blame it all on.

Mutual fund managers face the same problem that you do. They have to invest in a way that gives steady returns. Otherwise, there are two million youtubers who are doing 'alpha' and 'beta' and 'CAGR' analysis and will label you as a loser. This why mutual funds will never give high returns.

My advice for choosing a mutual fund or a portfolio manager. Forget the post facto analysis by youtubers. Watch videos of fund managers and fund house heads (or read about them). Try to understand how they think. Pick one up that you think you can trust. Even if there is a loss, you want to believe that it wasn't because of carelessness.

This is not very different from choosing a doctor. No amount of data analysis will put you at ease. Only your sixth sense can get you there.

 

[TEUser2K1]

Only your sixth sense can get you there.

Now, how to learn this is the pursuit
Wondering whether AI will guide us, there are already AI for stock markets it seems.

 

[t3chg33k]

Any instrument that guarantees return will gets priced like a bond.

Equity is different in that you are betting on humans. When you buy Adani shares, you are betting on Gautam Adani's ability to navigate the muddy waters of politics and finance. With humans, unlike with commodities or bonds, there is no 'guarantee'. E.g. MSFT share price has gone up 10 times since Nadella took over. Which 'value investor' (or pick your favorite strategy) would have guessed that in 2014? I for one thought that MSFT was going down and they wanted a brown fall guy to blame it all on.

Mutual fund managers face the same problem that you do. They have to invest in a way that gives steady returns. Otherwise, there are two million youtubers who are doing 'alpha' and 'beta' and 'CAGR' analysis and will label you as a loser. This why mutual funds will never give high returns.

My advice for choosing a mutual fund or a portfolio manager. Forget the post facto analysis by youtubers. Watch videos of fund managers and fund house heads (or read about them). Try to understand how they think. Pick one up that you think you can trust. Even if there is a loss, you want to believe that it wasn't because of carelessness.

This is not very different from choosing a doctor. No amount of data analysis will put you at ease. Only your sixth sense can get you there.

The irony is that the markets are going up now mainly because of the influx of new investors whose decisions are based on the FOMO propogated by YouTube. Hardly anyone has any idea about the company's roadmap and most don't even purchase stocks based on the personality, rather on hearsay.

The reality of course is that the free float shares in a company are limited and at a certain point they will become excessively overvalued. Not everyone can withstand the selling phase. The Indian market will keep behaving irrationally for time to come.

 

[TEUser2K1]

The reality of course is that the free float shares in a company are limited and at a certain point they will become excessively overvalued. Not everyone can withstand the selling phase. The Indian market will keep behaving irrationally for time to come.

Then everyone will be reminded of (in)famous quote:
"The market can stay irrational longer than you can stay solvent. This oft-cited quote, or versions of it, is attributed to famous economist John Maynard Keynes. The message here is that no one is bigger than the market, and no matter how right you think you are about a certain stock or trend, the market doesn't care."

 

[Mr.J]

The irony is that the markets are going up now mainly because of the influx of new investors whose decisions are based on the FOMO propogated by YouTube. Hardly anyone has any idea about the company's roadmap and most don't even purchase stocks based on the personality, rather on hearsay.

There's an even worse class of 'traders'. Idiots who are gambling in derivatives, based on what they see on social media.

https://www.moneycontrol.com/news/business/markets/sebi-tightens-fno-vigil-forms-panel-for-risk-management-investor-protection-in-equity-derivatives-12756269.html

 

[anmolbhard004]

Then everyone will be reminded of (in)famous quote:
"The market can stay irrational longer than you can stay solvent. This oft-cited quote, or versions of it, is attributed to famous economist John Maynard Keynes. The message here is that no one is bigger than the market, and no matter how right you think you are about a certain stock or trend, the market doesn't care."

the moment I sell a stock it rockets up, I bought MAZDOCK in dec 2023 sold it on 3rd july it was close to 3k , now its close to 6k. I assume it will come down after budget.

 

[dpandey]

"The market can stay irrational longer than you can stay solvent.

There is NO market as a single entity. There are people, all rational, making decisions. These people differ in their ability and access to information. But they are all rational. The small timer many only see noise, but the big guys know what is going on.

The message here is that no one is bigger than the market,

Not really true for the Indian stock market. Is it being manipulated all the time. May not even be true of US.

When Bill Ackman announced his infamous 'Hell is coming', he triggered what seems like irrational behavior in hindsight. But the script he executed was very rational. Maybe evil, but fully rational.