Do it yourself

  Wishing all Readers on the auspicious occasion one of various Indian traditional New Years, popularly celebrated as Chaitra Navratri, Gudi Padwa, Ugadi, Chetti Chand etc. in different parts of the country. It is a pleasant coincidence that beginning of new financial year is coinciding with traditional New Year in many parts of the country. May the Lord Rama bless all with conscience, wisdom, devotion and courage to pursue the path of righteousness. ===============================   FY22 started on a frightful note. The deadly second wave of the pandemic had just hit the country. The cities across the country were gasping for oxygen. The hospitals were terribly overcrowded and so were cremation grounds. In a country that supplies medicine to the entire world, thousands of people were begging for couple of doses of medicine. Remdesivir, Tocilizumab,  Dexamethasone and Ivermectin had become common household names. Vultures were hoarding and black marketing essential medici...

Just when everything appeared to be settling nicely, the volatility in Indian equity markets has increased materially. The sharp corrections at any hint of adverse event highlights the jitteriness (and to some extent lack of conviction) of market participants. Considering that household investors (and traders) have increased their participation in the market significantly in past 6-8 weeks, the pain quotient of any sharp correction from here could be significantly higher. Evidently, while the benchmark indices are now mostly flat for past 8-9 weeks, the sectoral shifts have been meaningful. Investors have adopted inflation (commodities) and cyclical recovery (mid and small cap) as a primary investment theme. Financials, discretionary consumption and realty sectors have witnessed a major “move out”. The investors positioning seems to be, inter alia, based upon the following premise: (a)        The earnings recovery witnessed in 4QFY21 shall contin...

I shared my investment strategy with readers in December 2020. I expected 2021 to be one of the most difficult years for investors in terms of high volatility, poor expected returns from diversified portfolios and continued low return expectations from cash and debt. After 3months into the year, I am even more confident about my view. I continue to believe that to generate normal return on the financial asset portfolio one would need to maintain a certain degree of flexibility in portfolio. A part of the portfolio may be dedicated to active trading, at least in 1HFY22. I am therefore not changing my investment strategy for next 6months at least. I may share my current investment strategy as follows: Asset allocation I shall continue to maintain high flexibility in my portfolio, by keeping 30% of my portfolio as floating, while maintaining an UW stance of equity and debt. Large floating allocation implies that I shall be trading actively in equity. (a)   The fixed e...