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Equity Market Insights: A few themes are dominating the equity markets worldwide and in India. Many investors decide their investments based on themes which have already gained a lot of popularity. Here are some of the popular themes and the risks associated with them: Falling Interest Rates: There has been earnest demand by market participants to cut interest rates in the US and other developed economies on the back of falling inflation rates. Central Governments…

Equity Market Insights: “Investing is 5% intellect and 95% temperament. It means finding the strategy that will allow you to sit quietly when your emotions are screaming at you to do the wrong thing.” – Ian Cassel Unfortunately, having the right temperament for investment is not common. Stories of someone in your circle making a lot more money than you have a great potential to disturb the peace of mind and create an urge to…

Sentiments of greed, fear, and confusion are transient in the equity market. The sentiment cycles are permanent. Most of us have come across the following chart of the sentiment cycle. For those who are uninitiated, the below chart represents the cycle of greed and fear in any asset class with varying degrees of emotions. Sentiment cycles move from one extreme of greed to another extreme of fear which takes valuations also to extremes from their…

Be greedy when others are fearful and be fearful when others are greedy. – Warren Buffet Indian stock markets have taken a good leap forward after the exit polls declared the return of NaMo led NDA with a stronger mandate. This has bolstered the confidence of bulls on the back of expected continuity of reforms push. Although a stronger mandate ensures that there would be lesser obstacles in bringing and implementing reforms, any tangible gains…

‘Should I continue my SIP or stop?’, Owing to the recent market conditions, this is one question a lot of investors have asked and a question we have heard far too many times. But here’s a fact. The mutual fund industry in India added ~9.15 Lacs new SIPs every month of last FY (as per AMFI released data). The SIP contribution in India is increasing because investors are becoming more and more aware of the…

Despite the various reading material available in digital and print media nowadays, there really cannot be the one ideal guide for financial planning. What you invest in and how, is directly proportional to your goals in life, your willingness to take risks, your age and the corpus you have created. There is no one-fits-all solution and hence the need for financial advisory. As per a study last year, 70% of Indian investors are working with professional financial…

Since 2013, SEBI has been trying to police the way mutual funds are being presented to the investors, trying to make it increasingly transparent. At first, there were the color-coded risk-profilers that came along with the mutual funds. But in 2015, SEBI probably thought the investors were having to indulge in a lot of logical reasoning trying to match the colours with the risk profiles, and thus introduced the Riskometer. A standard Riskometer is a…

Sometimes inaction speaks louder! – Action Bias If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring. – George Soros When the investors are not clear of the situation in the market, they are prone to action bias i.e. they trade even though there is no evidence of returns. The notion that the more you trade, the more returns you get is false because on top of no…