Do it yourself

The empirical evidence in India suggests that the returns from a SIP stabilize around the underlying asset's long term average return. I analyzed the Nifty50 data from 01 January 2001 to 01 November 2025. I assumed various investors invested a fixed amount at beginning of each month for a tenure of 299 months (25yrs), 240 months (20yrs), 180months (15yrs), 120 months (10yrs), 60 months (5yrs) and 36 months (3yrs). Actual Nifty50 data (closing price on first day of each month) was taken for the sake of convenience, assuming dividend yield cancelled the fund management charges and tracking error (for ETF investors) and brokerages and impact cost for direct equity investors. The analysis indicates that an SIP in Nifty50 started to outperform the Nifty50 index return only after 7 yrs. The outperformance peaked around 180 months (15yrs) and started to decline. For 20 yrs tenure, Nifty50 monthly SIP returns (CAGR) is almost same as the change in Nifty50. For 25 yrs tenure, SIP returns ou...

India is entering the final stretch of the festive season. The symbolic victory of light over darkness is behind us; the wedding calendar is in full flow; preparations for Christmas and the New Year have begun. Financial markets, too, seem to have moved past a despondent summer, supported by improving global liquidity, softer inflation prints, and resilient domestic earnings. This period also offers a moment for reflection. Every year, I revisit the legend of Rāma as narrated by Goswami Tulsidas in the Ramcharit Manas—not as mythology, but as behavioural wisdom. Hidden in its verses are principles that map surprisingly well to the discipline of Systematic Investment Plans (SIPs), especially for household investors. The two lessons below may be familiar to regular readers, but they remain worth revisiting. When to start SIP and how long to continue it सम   प्रकास   तम   पाख   दुहुँ   नाम   भेद   बिधि   कीन्ह। ससि   सोषक   पोषक   समुझ...

If social media posts are any guide to the popular sentiments, then definitely the Indian equity markets have frustrated even most seasoned investors. In particular, the young investors and traders who had their first tryst with the equity investing/trading are sounding completely disillusioned. The seasoned investors who have experience of negotiating bear markets multiple times, are mostly frustrated due to the lack of adequate policy support and regulatory overbearance. In my view, insofar as the policy support (or lack of it) is concerned, it is mostly due to misplaced expectations and persistence denial of actual execution. The issue of regulatory overbearance is however a matter of debate. However, the new class of investors is disillusioned for multiple reasons. First, many of them had committed to investing/trading as their preferred full-time occupation. After this severe market correction, their capital has materially depleted and their confidence is badly shaken. The worst p...

Presently, the total market capitalization of the NSE is close to Rs415 trillion, almost the same as it was during the last week of May 2024. The benchmark indices like Nifty 50, Small Cap 100, Nifty 500, Bank Nifty etc. are also trading almost at the same levels as prevailed during the last week of May 2024. Decent returns for the last one-year The benchmark indices may be down 12-16% lower from their September 2024 highs; but they are still yielding a return of 6-9% for the one-year period. Average asset under management (AUM) of Equity/Growth mutual fund schemes at the end of May 2024 was appx Rs25 trillion. The six-month period from June to December 2024 saw a net inflow of Rs2.7 trillion in these schemes. For the month of December, the average AUM of these schemes was Rs 31 trillion. This implies over 11% net value gain in these schemes during the June-December 2024 period. For the full year 2024, the value gain in equity MFs is close to 22%. Most equity-oriented funds hav...

  Rising participation of household (retail) investors in the Indian stock markets has been a topic of interest for the past couple of years. Most analysts and strategists have highlighted this as a key factor behind a sustained rise in the benchmark indices and low volatility, despite subdued foreign flows. Even the Prime Minister and many senior ministers made it a point in their campaign in the recently concluded general elections. In particular, a consistent rise in household investments in the mutual funds through systematic investment plans (SIP - a popular method to automatically invest a predetermined amount at predetermined intervals) has been cited as a strong support for the Indian equities. Most market participants are confident about this support to the Indian equity markets and its positive impact on the valuation, volatility and breadth of the market. I acknowledge the rise in the participation of household investors in equity markets. I am however not very confident...

For two years 2017 and 2018, the growth in Indian stock market was mostly attributed to the institutionalization of household financial savings, as investors increasingly turned to the professional fund managers for managing their money. The asset under management of mutual funds, portfolio managers, pension managers, ULIPs etc grew at highest rate. The regulators also supported the fancy campaign "Mutual Fund Sahi Hai!" Net inflows in domestic mutual funds quickly reached from sub Rs5000cr during summer of 2016 to Rs.20,000cr in autumn of 2017. The contribution through systematic investment plans (SIP) increased from Rs3000cr in April 2016 to over Rs8000cr by end 2018. The total asset under management of equity mutual funds had increased from ~Rs5trn in early 2017 to over Rs10trn by August 2018. In July 2020, the net inflows in mutual funds were negative.   The Economics Times, recently conducted a survey of investors to analyze the trend. The survey discovered th...