Consistent Performers versus Flash in the Pan Performers
Choose your equity funds on the basis of consistent performance and not recent winners.
There are about 25 large cap equity funds that are good performers on a one year basis relative to their peer set. But out of these only 9 were in the top list on a five year basis!
In the same line out of 22 Small & Mid(S&M) cap equity funds that are good performers on a one year basis only 7 were in the top list on a five year basis.
Equity Markets After a long rally, equity markets fell 1% in September, after reaching an all time high on September 8th.
Markets came down by almost 2.31% from its peak. Investors are finally realizing that it will take some time for the new government in
action to translate to higher profits.
Global growth is not encouraging – China and Germany are slowing down. US is better than last quarter but still far away from increasing interest rates.
We remain cautious at these levels especially with rising geo-political tensions and continue to maintain an underweight stance.
Power of Six 1. List your needs e.g., Funding higher education for children, retirement corpus etc.
2. Estimate the cost in today’s rupees.
3. Add for inflation (increase in cost of living).
4. Given your ability to save every month, what is the rate of return required to grow your savings to?
5. Assess whether this rate is practically doable – else you can either increase savings per month or scale down your dream.
6. Execute the savings plan with discipline.