Time for some extra caution
After some exciting action post presentation of Union Budget for FY22, the benchmark indices have moved sideways with heightened intraday volatility. The broader markets have definitely outperformed suggesting some superlative returns for the investors. However, when assessed from the rout of small and midcaps in 2018 and 2019, it is clear that broader markets may not have actually yielded much return, even to the investors who have stayed put for 3year. For example, Nifty Smallcap100 index has not yielded any return for past 3years; and Nifty Midcap100 return is only slightly better than the bank deposit return since March 2018. Notwithstanding the massive visual gains recorded by equity prices in past 12 months, the portfolio returns for most investors may have been below par. The returns on debt part of the portfolio have been poor, with real returns being negative in many cases. For a large proportion of investors, debt part is usually equal to or more than the equity part. S...