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Author: Mayank Mehta

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MONTHLY MARKET UPDATE & OUTLOOK – JUNE’23

Financial lesson from economy of Norway

As of today, Norway boasts one of the highest GDPs per capita in the world falling only behind Switzerland & a select group of micro nations. The country has

1.    A robust trade surplus;

2.    One of the highest national life expectancies;

3.    Extremely skilled workforce

4.    A very low unemployment rate;

5.    International recognition as aplace that is very easy to do business.

However, Norway wasn’t always this prosperous. In the 1960s it was an economy mainly based on fishing with a GDP similar in size to underdeveloped countries like Bangladesh or Nigeria.

But, in May of 1963, the Norwegian government asserted sovereign rights over natural resources in areas of the North Sea and they found a lot of oil. In the mid-70s, Norway produced more oil per capita than any other country in the world and even today it is only beaten out by the UAE & Saudi Arabia.

The oil boom caused Norway’s GDP to grow over five times in the 1970s, from $12B to $65B,but this newfound wealth was not being generated through private companies like Shell, Exxon or BP but rather a publicly run and owned company. 

This meant that the profits from oil sales made the Norwegian government very rich and if they wanted, they could have easily gone on a public spending spree, building fancy cities and public infrastructure or even reducing taxes but they didn’t and even today income and business taxes in Norway are still among some of the highest in the world.

Norwegian government had the foresight to realize that oil wealth was not forever and the citizens of Norway would not be satisfied if they had to go back to fishing in a generations time so the government invested the money into a sovereign wealth fund, Norway Government Pension Fund Global. This is the largest sovereign wealth fund in the world (with $1.3 trillion Assets undermanagement) beating out China’s State Investment Corporation which is remarkable considering that China has a population 270 times larger than Norway. 

This also means that every citizen of Norway essentially has around $250,000 (INR 2.12crore) invested into a giant hedge fund. However, only the profits generated from these investments are used to fund things like education, infrastructure, hospitals etc. Recently, the fund posted $84B quarterly profit.

Norway was a country that won the oil lottery in1970s. But, the citizens of the Norway did not get to enjoy the proceeds of the lottery and every penny went towards the corpus of the fund, which further was invested in assets across the globe. Some years down the line, the country may run out of the oil resources but the impact will not be much.

As an investor, our goal in life should be similar to that of Norwegian government. In the early healthy years of our working life, we should invest aggressively, into businesses, stocks and real estate so that, in the later years, these assets provide us with a steady source of income. Many may not know but

·       78% of athletes go broke within 2 years of retirement

·       70% of lottery ticket winners go bankrupt in less than 5 years

·       60% of NBA athletes go broke within 5 years of retirement

~ It doesn’t matter how much you make. What matters is how much you keep & what you do with it~

Quote of the month

In my view, the biggest investment risk is not the volatility of prices, but whether you will suffer a permanent loss of capital. Not only is the mere drop in stock prices risk, but it is an opportunity.

– Li Lu, founder, Himalaya Capital 

  • From the global leaders:

“To me, India is the real future,” Mark Mobius, the cofounder of Mobius Capital Partners

Indian macro dataflow remained strong:

  • Manufacturing PMI: Manufacturing PMI dropped to 57.8 in June 2023 from May’s 31-month peak of 58.7 but remained in expansion zone (>50 points) for the 24th straight month;

  • Services PMI: The Indian services PMI declined to 58.5 after reaching a 13 year high in April 2023. It remained in expansion zone (>50 points) for the 23rf straight month;

  • GST Collection: India’s gross GST revenue collection in June stood at Rs. 1,61,497 crore, registering a 12 per cent YoY rise;

  • Credit growth: Scheduled commercial banks (SCBs) reported a robust credit growth of 15.4% in FY23 compared to 9.7% in FY22. With this, India witnessed the sharpest rise in borrowings in the last eleven years;

  • Inflation: Retail inflation likely to be flat at 4.26% in June;

  • Forex: India’s foreign exchange reserves dropped by $2.901 billion to $593.198 billion.

Equities:

  • Indian equities ended the month with strong gains and NIFTY / S&P BSE Sensex closing near all-time highs. NIFTY 50 / S&P BSE Sensex ended the month ~3.5% higher.

  • Mid-cap and small-cap indices outperformed large-cap indices and were up 19.0% and 20.5%, respectively;

  • The rally was primarily driven by continued buying by FPIs, upbeat US economic data, resilient domestic economic activity, receding inflationary pressures and subdued crude oil prices.

  • Sector-wise, all sectors ended positive;

  • FPIs bought equities worth USD 6.7 billion (May 2023: USD 5.0 billion) in June 2023 and have cumulatively bought equities worth USD 13.6 billion in Q1FY24;

  • Mutual Funds SIPs touched Rs. 14,700 cr. for the first time reflecting the strong belief of Indian investors in equities. 

Fixed income:

  • MPC minutes released for its June 2023 meeting were on a hawkish side with most members cautioning against complacency towards inflation in view of the resilience in growth and emphasised bringing down the headline CPI to its target of 4% and not just within the tolerance band (2%-6%);

  • Gsec yields trended higher during the month and 10Y Gsec yield ended the month at 7.12%, up 13 bps on month on month basis;

  • Average interbank liquidity surplus increased in June 2023 driven by fall in currency in circulation on back of deposit of INR 2000 banknotes and forex purchases by RBI.

  • Outlook:

  • Global growth trend remained mixed with economic activity supported by steady improvement in services sector and tight labour markets across most major economies. While US activity remains better than expected, Eurozone, UK and China data surprised on the downside. Elevated interest rate and modest demand outlook for goods is likely to keep housing and manufacturing activity muted. Overall, global growth is expected to slow down driven by tighter financial conditions and losing consumption momentum.

  • As on June 30, 2023, NIFTY 50 was trading at ~18x FY25E price to earnings multiple. The valuation multiples have moderated from their recent peak but is at elevated levels vis-à-vis historical average

  • We remain positive on equities over the medium-to-long-term considering the resilient domestic growth outlook, robust corporate profitability and growth supportive policies. However, Accelerated monetary policy tightening, a sharp slowdown in global growth, persistent inflation, a slowdown in earnings growth and a delay in recovery in the rural sector are key near-term risks. 

We mentioned in our April’23 monthly outlook that growth/quality will outperform value in the next few months. The same is evident from the chart below and the outperformance is likely to continue for the next few months.  
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Investing in the US markets

In the last twelve years, US technology index – NASDAQ 100 has delivered 544% – almost double of Sensex (220%). Even better, if one would have invested from India, the investor would have earned a return of approx. 1,000% just because of dollar appreciation from INR 45 per dollar to INR 83 per dollar. Hence, international exposure to US stocks can not be avoided in the portfolio.

Here are the key benefits of investing in US markets (NASDAQ 100) from India:

1. Access to 100 of the largest non financial companies:

Following 10 companies by market capitalization have a weightage of 50% in NASDAQ 100:

2. Hedge against INR depreciation:

As evident from the chart below, an investor earned around 5X returns over Sensex in the last 12 years just by investing in ETFs of NASDAQ 100 from India.

3. Global exposure:

NASDAQ-100 Index comprises of companies with overseas business &  generates the bulk of their revenue from different countries.

It comprises of large multinational companies with focus on disruption.

4. High-growth & innovative large cap companies

 

NASDAQ-100 companies on an average spend 3.5x more than S&P 500 index companies for R&D. 62 companies in NASDAQ 100 in near past have filed patents across 34 key areas of disruptive technology.

5. Exposure to “new economy” sectors

NASDAQ 100 is market capitalization weighted index comprised of 100 most innovative and rapidly expanding non-financial Companies. US economy growth is shifting from capital intensive, traditional industries to the new economic sectors such as healthcare, technology and consumer. Last 10 years sales growth across industry in US large and Midcaps can be seen in Real Estate, healthcare and technology.

6. Sector and geographical diversification

However, there are certain points one should consider before investing in the US markets:

 

  1. Volatility: US markets are more volatile than Indian markets;

  2. Taxes: W.e.f. 01/04/2023, Indian government will tax foreign funds, foreign ETFs and foreign stocks at per the slab rate of investors (without the lower tax of 10% as applicable for Indian equities);

  3. Currency exchange rates can be unfavorable at times;

  4. Higher interest rates may affect the growth of companies listed in US which may be evident in lower stock returns.

  5. Since these companies generate most of their revenues across the world, a recession may affect the stock returns  in near term.

 

However, for the long run, we remain bullish on companies listed on NASDAQ 100. An investor with aggressive risk appetite or suitable investment objective (foreign children education or world tour etc.) may consider investing in the US markets. For more information, kindly connect with your respective relationship manager.

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Sleeping Elephant Is Rising

As per Maddison (2020) estimates, India’s share in the global GDP was 24% in 1700. By 1820, this number fell to 16% and by the time of independence, the number had fallen to 5%. In 250 odd years, India went from contributing a quarter of global GDP to less than 5%.

 

As India completed 75 years of independence, we witnessed much change. The Indian economy now stands as among the largest and fastest growing in the world, truly breaking free from the shackles of colonialism. The changes are not just been effected at a micro level. The big picture has not been lost in this quest as well:

  • The Insolvency & Bankruptcy Code, 2016: Not only was starting a business in India a mammoth task, but shutting one down was perhaps an even bigger one. The introduction of IBC brought the much needed clarity in the bankruptcy law.

     

  • Goods and Service Tax, 2017: considered as the most landmark reform of independent India. Prior to GST, a litany of indirect taxes exited – each requiring separate registration and filing norms. Indirect taxes varied across states and hampered interstate movement of goods. GST revenues have been above the Rs.1.4 lac crore for 12th continuous month.

     

  • Real Estate Regulatory Authority (RERA): not only protected the rights of homebuyers but also promoted the development of private enterprise by maintaining their solvency and creditworthiness.

     

  • Direct taxes: Year 2017 saw a lowered personal income tax rate, and in 2019, corporate taxes were reduced to 22% to counter underreporting of income and the black economy. The introduction of taxpayers charter, efforts to reduce litigation and use of technology have moved the system away from one of enforcement to facilitation.

     

  • Ease of doing business: When Modi government took over, India was ranked 142 in the rankings published by the World Bank. Close to 1500 old legislations were identified and scrapped. In 2020, India’s rank improved to 64 – a 79 position improvement in just 5 years.

     

  • Foreign Direct Investment: Foreign Investment Promotion Board (‘FIPB’) was abolished in 2017. Several sectors that required approval prior to investment were moved to the automatic route. For rest, individual ministries became approval authorities. India received the highest-ever FDI inflows of $ 84.8 bn in FY 22.

  • The process of registration of patents and trademarks was completely revamped and a large number of additional examiners were recruited. Compared to 2015-16, number of patents filed increased from 12,000 to 28,000 and the number of trademarks increased from 65,000 to 2.5 lacs in 2020-21.

     

  • Production Linked Incentives (PLI) schemes were introduced to boost size and scale in manufacturing. Focus shifted from providing support towards target linked output rather than input. Total production from PLI schemes is estimated to be $500 billion over the next few years. PLI schemes have potential to generate approx. 60L jobs in next few years.

     

  • Definition of MSME was revised. Micro enterprise defininition raised investment threshold to Rs. 1 crore (from Rs. 25 lacs) and adds turnover of less than Rs. 5 crore as an additional criteria. Investment threshold of Small & medium firms have been doubled.

     

  • Four labour codes – Code on Wages, 2020; the Industrial Relations Code, 2020; the Code on Social Security, 2020; and the Occupational Safety, Health & Working Conditions Code, 2020 – subsumed 29 central labour laws.

  • Infrastructure:

     

  • India has spent $14 trillion on infrastructure in the 75 years since independence. 50% of that (or $7 trillion) was spent in the last 9 years.

  • The pace of building National Highways increased from 12KM per day in 2014-15 to 37 KM per day in 2020-21.

  • Sector specific programmes such as Bharatmala (highways), sagarmala (ports), UDAN (air travel) were announced.

     

  • Close to 55% bank accounts opened in the world during 2015-18 were opened in India leveraging the simplified KYC norms.

     

  • National Payments Corporation of India – Unified Payments Interface (UPI) processed 6.8 billion transactions amounting to Rs. 51 billion in 2022.

     

  • 112 backward districts are being transformed under Aspirational Districts Programme (ADP).

     

  • In 2016, Startup India was launched. A bundle of laws were eased and income tax exemption was granted. Since then, 65,000 startups have been recognized. India’s startup ecosystem is third largest in the world.

India’s growth story will be led by the private sector, with the government playing the role of enabler and a facilitator.

 

A growth rate of 6% during 2022-47 will see Indian economy reach $16,4 trillion by 2047, a growth rate of 8% in this period will see economy reach a size of $20.6 trillion and a 10% will take economy to $32.6 trillion.

 

Source: Made in India by Amitabh Kant

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Financial Lessons From Shrimad Bhagwat Geeta

Bhagavad Gita is the divine discourse spoken by the Supreme Lord Krishna himself and is the most popular and well known of all the sacred scriptures.

 

Mahatma Gandhi once said “When doubts haunt me, when disappointments stare me in the face, and I see not one ray of hope on the horizon, I turn to Bhagavad Gita and find a verse to comfort me; and I immediately begin to smile in the midst of overwhelming sorrow. Those who meditate on the Gita will derive fresh joy and new meanings from it every day.”

 

It is an unquestionable fact that schools and colleges gives us knowledge but Bhagavad Gita gives us wisdom and even the greatest people on this planet seek wisdom in tough situations.

 

Hence, in the subsequent paragraphs, we have shared key principles from Bhagavad Gita that may benefit you in the investment journey:

    1. Control your emotions: The Bhagavad Gita teaches us that it is important to control our emotions, including fear, greed, and anger, when making investment decisions. Emotional decisions can lead to irrational choices that may negatively impact our portfolio.

       

    2. Focus on long-term goals: The Gita emphasizes the importance of focusing on the long-term, rather than short-term gains. Similarly, when investing, it is important to have a long-term investment horizon and focus on achieving your financial goals.

       

    3. Practice detachment: The Bhagavad Gita teaches us to practice detachment from the outcome of our actions. In investing, this means we should not become too attached to any particular stock or investment, and be prepared to sell it if necessary.

       

    4. Embrace uncertainty: The Gita teaches us that the only thing that is certain is uncertainty. Similarly, in investing, it is important to acknowledge that there will always be risks and uncertainties associated with investing.

       

    5. Be patient: The Bhagavad Gita emphasizes the importance of patience and perseverance. Similarly, when investing, it is important to be patient and avoid making impulsive decisions based on short-term fluctuations in the market.

       

    6. Focus on the process: The Gita teaches us to focus on the process rather than the outcome. In investing, this means focusing on a sound investment strategy and sticking to it, rather than trying to chase after quick gains.

       

    7. Seek knowledge: The Bhagavad Gita emphasizes the importance of seeking knowledge and wisdom. Similarly, in investing, it is important to educate ourselves and seek out information and insights that can help us make better investment decisions.

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MONTHLY MARKET UPDATE & OUTLOOK – MAY’23

India transformed in less than a decade; different from 2013: Morgan Stanley

This India is different from what it was in 2013. In a short span of 10 years, India has gained positions in the world order with significant positive consequences for the macro and market outlook, Morgan Stanley said in a report.

 

Ten big changes, mostly because of India’s policy choices, and their implications for its economy and market were highlighted in the report:

 

  1. Supply-side Policy Reforms: Infrastructure has picked up & corporate tax at par with peer countries;

  2. Formalisation of the economy: GST collection on an upward trend & digital transactions as % of GDP at record high;

  3. Real Estate (Regulation and Development) Act;

  4. Digitalizing Social Transfers;

  5. Insolvency and Bankruptcy Code;

  6. Flexible Inflation Targeting;

  7. Focus on FDI;

  8. India’s 401(k) Moment: SIP, NPS and EPF investment in equities at record high;

  9. Government Support for Corporate Profits;

  10. MNC Sentiment at Multiyear High: India’s service export market share accelerates.

The ten macroeconomic and stock market implications of the aforesaid changes:

  1. Manufacturing and capex as % of GDP to increase steadily: the share of both to rise in GDP by approximately 5ppt by 2032;

  2. Export market share to double: Export market share will rise to 4.5% by 2031, nearly 2x from 2021 levels;

  3. Major shift in consumption basket: As India’s per capita income increases from US$2,200 currently to about US$5,200 by F2032, this will have major implications for change in the consumption basket, with an impetus to discretionary consumption;

  4. Lower volatility in inflation and shallower interest rate cycles: Shallower rate cycles could also imply more benign equity market cycles;

  5. Benign trend in current account deficit

  6. A profit boom: The share of profits in GDP has doubled from all-time lows hit in 2020 and are set to rise further – maybe even double from here – leading to strong absolute and relative earnings. This explains India’s apparently rich headline equity valuations.

  7. Lower correlation with oil prices: Lower share of foreign portfolio (FPI) in current account funding has reduced the stock market’s negative return correlation with oil prices, especially when oil prices rise due to supply disruption.

  8. Lower correlation with US recession: As India’s reliance on global capital market flows has reduced, the market’s sensitivity to a US recession and US Fed rate changes also seems to be fading.

  9. Valuation re-rating: This reflects persistent domestic demand for stocks and higher growth for longer. India is trading at a premium to long-term history, albeit well off highs and in line with recent history.

  10. India’s beta to EM has fallen to 0.6: This is a consequence of improved macro stability and reduction in dependence on global capital market flows to fund the CAD.

Credits: Brian Feroldi

Quote of the month

You cannot sow something today and reap tomorrow! A seed has to go through the various seasons before it turns into a fully grown tree. So is the case with investing

 

-Parag Parikh

From the global leaders:

 

Indian macro dataflow remained strong:

 

  • Manufacturing PMI: Manufacturing PMI at 31-month high of 58.7 in May on robust demand for new orders and remained in expansion zone (>50 points) for the 23rd straight month;

  • Services PMI: The Indian services PMI declined to 61.2 in May after reaching a 13 year high of 62 in April 2023. It remained in expansion zone (>50 points) for the 22nd straight month;

  • GST Collection: Gross GST collection for May 2023 stood at Rs. 1.57 lakh crore as against Rs. 1.41 lakh crore for May 2022, registering a growth of 12%;

  • Credit growth: Credit growth reached 15.42% YoY as of 19th May 2023 against YoY growth of 11.14% as observed on 20th May 2022;

  • Inflation: India’s retail inflation eases to more than 2-year low of 4.25% in May;

  • Forex: India’s foreign exchange reserves stood at $595.1 billion as of June 2.

Equity:

 

  • SENSEX grew by 2.5% in May.

  • BSE Mid-cap and small-cap indices outperformed large-cap indices and were up 6.3% and 5.6%, respectively

  • Sector-wise, all but two sectors ended in green, namely metals (-2.9%) and oil & gas (-1.6%). Auto (+7.9%), Realty (+7.7%) and IT (+6.7%) indices were the largest gainers.

  • Among the top gainers globally were Japan (+7.0%), Taiwan (+6.4%) and Brazil (+3.9%). Meanwhile, Hong Kong (-8.3%), the UK (-5.4%) and France (-5.2%) were the most affected;

  • FIIs (Foreign Institutional Investors) continued to be net buyers of Indian equities in May (+Rs. 38,093 crore);

  • Mutual fund SIP flows hit new high of Rs. 14,749 crore in May.

Fixed income:

 

  • The US Federal Reserve in its May-23 policy meet, raised the Fed Funds Rate by 25 basis points to 5%-5.25%;

  • The European Central Bank raised its key interest rates by 25 basis points during its May meeting;

  • The Bank of England raised the bank rate by 25 basis points to 4.5% at its May policy meet;

  • 10 year G-Sec rallied to sub 7% as as the US yields dropped sharply post FOMC meet wherein Fed signalled a likely end to the rate hiking cycle. 10-year

    benchmark traded in a range of 6.95%-7.13% during the month;

  • System liquidity remained in surplus with average monthly liquidity coming down to Rs. 72,594 crores surplus vs a surplus of Rs. 1,53,205 crores in the month of April.

Outlook:

 

  • Post March-2023, equity valuations have moved higher due to renewed interest from FIIs. India’s strong macro-economic situation has led to positive overall sentiments.

  • We are in a neutral situation where equities cannot be avoided due to strong macros, nor it is recommended to be overweight on equities, due to valuations.

  • The Union Budget’s focus on higher Capital Expenditure by the Centre & States; push for consumption through lower taxes and goal of fiscal consolidation, together underpin India’s growth.

  • Companies have started deploying the excess profit, as evidenced by the increase in ordering activity – a precursor to increase in private Capex. We should see an investment driven economic growth starting FY24E.

  • We expect that strong demand scenario (domestic and international businesses), softening raw material inflation, easing global supply chains, eventual pick up in rural income as rural economy responds to increasing government infrastructure spends and benefits from improved crop prices and sharp surge in consumption spending due to wedding season should help achieve broad based domestic growth in coming quarters. Hence, we are overweight on domestic demand related sectors as growth and earnings certainties may be higher in related segments

Disclaimer: The views expressed herein constitute only the opinions/ facts and do not constitute any guidelines or recommendations on any course of action to be followed by the reader. This information is meant for general reading purposes only and is not meant to serve as a professional guide for the readers

 

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Peter Lynch’s 25 Golden Rules for Investing

Peter Lynch is widely regarded as one of the greatest investors of all time. He is known for his successful track record as the manager of the Fidelity Magellan Fund, which he ran from 1977 to 1990.

 

During his tenure, Lynch grew the fund from $18 million to over $14 billion, achieving an average annual return of 29.2%, which is more than double the return of the S&P 500 index during the same period. His success was due to his investment philosophy of finding undervalued companies with strong growth prospects, and his ability to identify emerging trends before they became widely recognized.

 

Overall, Peter Lynch is remembered as a legendary investor who achieved exceptional results by sticking to his investment principles and taking a long-term perspective on the companies he invested in.

Rule 1: Investing is fun and exciting, but dangerous if you don’t do any work.

 

Rule 2: Your investor’s edge is not something you get from Wall Street experts. It’s something you already have. You can outperform the experts if you use your edge by investing in companies or industries you already understand.

 

Rule 3: Over the past 3 decades, the stock market has come to be dominated by a herd of professional investors. Contrary to popular belief, this makes it easier for the amateur investor. You can beat the market by ignoring the herd.

 

Rule 4: Behind every stock is a company. Find out what it’s doing.

 

Rule 5: Often, there is no correlation between the success of a company’s operations and the success of its stock over a few months or even a few years. In the long term, there is a 100% correlation between the success of the company and the success of its stock. This disparity is the key to making money; it pays to be patient, and to own successful companies.

 

Rule 6: You have to know what you own, and why you own it. “This baby is a cinch to goup” doesn’t count.

 

Rule 7: Long shots almost always miss the mark.

 

Rule 8: Owning stocks is like having children — don’t get involved with more than you can handle. The part-time stock picker probably has time to follow 8-12 companies, and to buy and sell shares as conditions warrant. There don’t have to be more than 5 companies in the portfolio at any one time.

 

Rule 9: If you can’t find any companies that you think are attractive, put your money in the bank until you discover some.

 

Rule 10: Never invest in a company without understanding its finances. The biggest losses in stocks come from companies with poor balance sheets. Always look at the balance sheet to see if a company is solvent before you risk your money on it.

 

Rule 11: Avoid hot stocks in hot industries. Great companies in cold, non- growth industries are consistent big winners.

 

Rule 12: With small companies, you are better off to wait until they turn a profit before you invest.

 

Rule 13: If you are thinking of investing in a troubled industry, buy the companies with staying power. Also, wait for the industry to show signs of revival. Buggy whips and radio tubes were troubled industries that never came back.

 

Rule 14: If you invest $1000 in a stock, all you can lose is $1000, but you stand to gain $10,000 or even $50,000 overtime if you are patient. The average person can concentrate on a few good companies, while the fund manager is forced to diversify. By owning too many stocks, you lose this advantage of concentration. It only takes a handful of big winners to make a lifetime of investing worthwhile.

 

Rule 15: In every industry and every region of the country, the observant amateur can find great growth companies long before the professionals have discovered them.

 

Rule 16: A stock market decline is as routine as a January blizzard in Colorado. If you are prepared, it can’t hurt you. A decline is a great opportunity to pick up the bargains left behind by investors who are fleeing the storm in panic.

 

Rule 17: Everyone has the brain power to make money in stocks. Not everyone has the stomach. If you are susceptible to selling everything in a panic, you ought to avoid stocks and stock mutual funds altogether.

 

Rule 18: There is always something to worry about. Avoid weekend thinking and ignore the latest dire predictions of the newscasters. Sell a stock because the company’s fundamentals deteriorate, not because the sky is falling.

 

Rule 19: Nobody can predict interest rates, the future direction of the economy, or the stock market, Dismiss all such forecasts and concentrate on what’s actually happening to the companies in which you have invested.

 

Rule 20: If you study 10 companies, you will find 1 for which the story is better than expected. If you study 50, you’ll find 5. There are always pleasant surprises to be found in the stock market — companies whose achievements are being overlooked on Wall Street.

 

Rule 21: If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.

 

Rule 22: Time is on your side when you own shares of superior companies. You can afford to be patient — even if you missed Wal-Mart in the first five years, it was a great stock to own in the next five years. Time is against you when you own options.

 

Rule 23: If you have the stomach for stocks, but neither the time nor the inclination to do the homework, invest in equity mutual funds. Here, it’s a good idea to diversify. You should own a few different kinds of funds, with managers who pursue different styles of investing: growth, value small companies, large companies etc. Investing the six of the same kind of fund is not diversification.

 

Rule 24: Among the major stock markets of the world, the U.S. market ranks 8th in total return over the past decade. You can take advantage of the faster- growing economies by investing some portion of your assets in an overseas fund with a good record.

 

Rule 25: In the long run, a portfolio of well-chosen stocks and/or equity mutual funds will always outperform a portfolio of bonds or a money-market account.

 

In the long run, a portfolio of poorly chosen stocks won’t outperform the money left under the mattress.

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Monthly market update & outlook – March’23

Bombay plan 1944: Cognizant of the gaps post independence and the need to broad base industrial growth in India, a group of industrialists comprising JRD Tata, Ghanshyam Das Birla, Sir Purshotamdas Thakurdas, among others, banded together to imagine what independent India’s economy would look like. They published a plan for economic development for India, commonly known as the Bombay Plan, 1944:

 

  • It agreed on the need for rapid industrialization and central planning;

  • It saw an expanded role for India in global trade;

  • It saw support from government for development of private sector, rather than control;

  • It envisaged a doubling of India’s per capita income within 15 years;

  • It called for creating industries for the production of power & capital goods;

  • It targeted doubling of share of industry in economy from 17% to 35%.

 

However, the Congress appointed National Planning Committee (NPC) wanted government ownership of industry. The Bombay Plan, 1944 was an early example of private sector led efforts to design an economic roadmap for India but it did not pan out as expected because of differences with National Planning Committee.

 

Source: Amitabh Kant authored Made In India

Quote of the month

The real way to build wealth in the long run, is to find a limited number of things with a lot of potential, and not too much risk, and stay with them for the long term.

 

-Howard Marks

In the long run, GDP, corporate profits and stock market (Nifty) moves in line. As of today, we are a $3 trillion economy. As per estimates, India will reach $30 trillion economy by 2047 – Stock market may also touch new highs in the times to come (but with volatility).

From the global leaders:

 

Indian macro dataflow remained strong:

  • Manufacturing PMI: Manufacturing PMI rises to three month high of 56.4 in March and remained in expansion zone (>50 points) for the 21st straight month;

  • Services PMI: Services PMI slowed to 57.8 in March after a 12-year high in February but remained in expansion zone (>50 points) for the 20th straight month;

  • GST Collection: Collections of Rs. 1.6 lac crores in March was second highest collection ever;

  • Credit growth: Driven by strong demand for personal loans, NBFC growth and liquidity crunch, credit offtake grew by 15 per cent YoY in March. With this, India witnessed the sharpest rise in borrowings in last eleven years;

  • Inflation: March CPI inflation seen at 15-month low of 5.7%;

  • Forex: India’s foreign exchange reserves stood at $578 billion as of March 31;

  • GDP: Basis latest estimates, GDP likely to grow at 7% in FY23;

  • Trade Deficit: narrowed in February to USD 17.4 Bn as compared to USD 17.7 Bn in Jan.

Equities:

  • Domestic equity markets remained flat in the month of March with Nifty ending with a marginal gain of 0.3%;

  • Smallcap 250 and Midcap 150 index marginally underperformed Nifty;

  • FPIs bought Rs. 12,578 cr. of Indian equities in the month of March;

  • Mutual Funds SIP inflows remain in elevated zone at Rs. 13,000 cr.+ for the month of March reflecting the strong belief of Indian investors in equities.

  • The Indian equities have witnessed a time correction in the last one year (Increase in corporate profits leading to fall in valuations without any major fall in prices). Fund managers across industry have started to increase exposure to equities.

     

Fixed income:

  • RBI did not hike repo rate in the month of March;

  • The 10Y G-Sec crashed from high of 7.46 to 7.219 as of April 12, 2023;

  • The current curve remains very flat with everything in corporate bonds beyond 1 year up to 15 years is available @7.-7.65% range.

  • Despite high interest rates, there is high liquidity crunch in the system. Average systemic liquidity deficit stood at Rs. 31 Bn in March 2023 as compared to a deficit of Rs. 58 Bn in February 2023.

     

Outlook:

  • The broad indices have not corrected as much as individual stocks. The Nifty 500 barely moved on a 6 month basis even though nearly 45% stocks have corrected by more than 10%. There are many unknowns ahead such as monsoons and oil prices yet we trust the resilience of the Indian economy and believe that a SIP into a diversified fund such as our Midcap, Flexicap, Smallcap

    will be the best way to ride out these uncertainties.

     

  • Growth stocks have taken a hit after rise in interest rates. Since, RBI is near the peak of interest rate cycle, we expect the growth stocks to outperform in the next three-five year period after the rate cut cycle starts. Depending upon the risk profile, one may take exposure to mutual funds investing in growth stocks in a staggered manner of nine months.

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Monthly market update & outlook – April’23

Rs. 200 crore inheritance

  • In 2017, a person called Zee Business to enquire about the value of a few share certificates purchased by his grandfather around 1993.

  • To everyone’s surprise, the company was MRF (Madras Rubber Factory – a tyre manufacturer incorporated in 1960) & his grandfather held 20,000 shares purchased for Rs. 2 lacs in 1993.

  • In 2017, the shares were valued at around Rs.130 cr. (the price of one MRF share was Rs. 65,000). At current market price of Rs. 99,200, the shares must be valued around Rs. 200 cr. – excluding dividends. MRF is the first Indian share to cross Rs. 1 lac mark in futures.

  • The per annum return on the investment stands at 36% (excluding dividends).

The returns may sound very astonishing but key takeaways from this:

  • Power of patience: In today’s time when most investors check their portfolio’s return multiple times a day, it’s indeed a tough task to hold a company’s share or a mutual fund for 30 years. For 10 long years, from 1999 to 2009, MRF was trading around 1500 i.e. 0 returns. Most of the MRF investors must have exited the share during this phase – only to regret today when it crossed 1 lac recently.

  • No gain without pain: In the short run, the market could fluctuate but in the long run, the market works on fundamentals and good companies tend to reward their shareholders. On multiple occasions, MRF also corrected by more than 50% yet it has delivered close to 35% per annum return since IPO (1993).

  • Power of compounding is one of the most powerful yet underestimated force in this world. 35% compounded annually for 30 years is not 1050% (35% X 30 years) but 901,918%. Very few understand this.

Quote of the month

Owning stocks has continued to be twice as rewarding as owning bonds. Acting on this bit of information will be far more lucrative in the long run than acting on the opinion of 200 commentators & advisory services that are predicting the coming depression.

 

-Peter Lynch

From the global leaders:

 

Indian macro dataflow remained strong:

  • Manufacturing PMI: Manufacturing PMI at 4 month high in April on robust demand for new orders and remained in expansion zone (>50 points) for the 22nd straight month;

  • Services PMI: The Indian services PMI jumped to 62, reaching a 13 year high in April 2023. It remained in expansion zone (>50 points) for the 21st straight month;

  • GST Collection: Collections of Rs. 1.87 lac crores in April was the highest collection ever;

  • Credit growth: Scheduled commercial banks (SCBs) reported a robust credit growth of 15.4% in FY23 compared to 9.7% in FY22. With this, India witnessed the sharpest rise in borrowings in the last eleven years;

  • Inflation: WPI inflation eases to 29 month low of 1.34% in March;

  • Forex: India’s foreign exchange reserves stood at $588.8 billion as of April 28.

Equities:

 

  • The Nifty Index gained 4.1% in April;

  • Mid-cap and small-cap indices outperformed large-cap indices and were up 6.0% and 7.5%, respectively;

  • Sector-wise, all sectors ended positive, except IT;

  • Globally, India was the best performing market in April, followed by Russia (+4%), UK (+3%) and Japan (+3%);

  • FIIs continued to BUY aggressively in April’23, with net buying of INR 9,792 cr.;

  • Mutual Funds SIPs touched Rs. 14,000 cr. for the first time reflecting the strong belief of Indian investors in equities.

 
 

Fixed income:

  • The MPC kept the repo rate on April 6, 2023 unchanged to 6.50% in a unanimous decision surprising the market which were expecting a further 25bp hike;

  • The 10Y G-Sec crashed from high of 7.46 to 7.046 as of May 10, 2023;

  • The current curve remains very flat with everything in corporate bonds beyond 1 year up to 15 years is available @7-7.65% range.

  • System liquidity remained in surplus with average monthly liquidity rising to Rs.1,53,205 crores surplus vs a deficit of Rs. 1,271 crores in the month of March.

 

Outlook:

  • While geopolitical issues still persist (Russia-Ukraine conflict, US-China trade war, Taiwan Political status etc.) the global supply chains have seen tremendous improvement in the recent months. During March’23, commodity prices have been slightly volatile (at lower levels) and most of the base metal prices have seen some moderation in recent months. Brent currently stands at $72/barrel and has fallen by 25% over the past 6 months (down 15% over past one month). Lower commodity prices should give some room for inflation control and may give respite to concerns on global inflationary trends.

     

  • While things are evolving on the global front, for Indian economy on a relative term there are more positives than negatives. On the domestic front, the key indicators continue to remain encouraging. Strong CV sales growth, stable GST and income tax collections, robust commentary from the manufacturing sectors, steady pickup in the credit growth to pre covid levels, stable exports growth and strong consumer spending are the key positive indicators.

     

  • Companies have started deploying the excess profit, as evidenced by the increase in ordering activity – a precursor to increase in private Capex.

     

  • Overall, despite the near-term recessionary concerns, over the medium to long term, Indian equity market looks to be on a strong footing. The current ongoing geo-political events may pose a risk to equities in the near-term, however, we continue to be bullish on India’s long term growth story.

 
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5 powers that will make money for you while you rest

1. Power of compounding

Albert Einstein once said “Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it”.

What is compounding?

Compounding is the ability of an investment to generate earnings that are reinvested to generate even more earnings over time.

Compounding is a powerful force because as the investment grows, the amount of interest or returns generated also grows, and over time, the growth can become significant. The longer the investment is left to compound, the greater the potential for growth becomes.

Compounding can be used to build wealth over the long term, as even small investments can grow into substantial sums of money over time. A Rs. 2000 SIP in one of the oldest midcap fund, Nippon India Growth Fund, since inception would have created a corpus of Rs. 2.5 crore (investment Rs. 6.5 lacs only)

It’s the most time consuming to achieve the first crore. Subsequently, power of compounding works in investors favor to reach subsequent crores.

2.Power of starting early

As evident from the below picture, even though Savita is making 74% less investment during her journey, yet she is able to create a 113% higher corpus than Kavita just by starting early.

Cost of delaying is very high in the investment journey:

3.Power of patience

We all know that equity markets do not give a linear return like a fixed deposit. Volatility is the price an investor has to pay to get that ‘extra return’.

Black swan events like COVID or 9/11 or Russia Ukraine war can have an immediate impact on the markets. However, investors who have patiently held their investments, have created huge wealth for themselves.

Equity Markets witness 10-20% temporary declines almost every year. Despite an intra year decline of more than 10% almost every year, 3 out of 4 years ended with positive returns!

Despite several intermittent crises, Indian Equities have gone up over the long run mirroring earnings growth

4.Power of diversification: 

Diversification is the practice of spreading your investments across different asset classes, sectors, and geographies. It helps reduce risk by ensuring that a single event or market downturn doesn’t wipe out your entire portfolio.

No asset class is able to consistently give linear returns. Therefore, it is important to diversify portfolio across various asset classes:

Within equity as well, it is prudent to diversify as no category works every year: 

5.Power of discipline:

Discipline is essential to avoid emotional decision-making, such as panic selling during market downturns or chasing after hot stocks. It involves sticking to a long-term investment strategy, maintaining a well-diversified portfolio, and avoiding impulsive investment decisions.

Do you know the major difference between a successful and unsuccessful investor? Successful investors are disciplined! Their investment decisions are not driven by greed, fear, and emotions. They know how to react when the market turns volatile.

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Chat GPT (Artificial-Intelligence Chatbot) Answers Common Financial Queries

What is Chat GPT?

 

ChatGPT is a powerful artificial-intelligence chatbot developed by OpenAI and launched in November 2022. It garnered attention for its detailed responses and articulate answers across many domains of knowledge. It is capable of understanding human speech and producing in-depth writing that is easily understood by humans. Microsoft has planned a $10 billion investment in ChatGPT.

 

It can be accessed at https://chat.openai.com

 

We asked ChatGPT ten common financial queries and here’s what ChatGPT said:

Q.1 Why equity generates higher return in the long run?

 

ChatGPT’s response: Equity investments can generate higher returns in the long run due to several reasons:

  1. Ownership in the company: When an investor buys a stock, they are effectively buying a share of ownership in the underlying company. This means that as the company grows and becomes more profitable, the value of the stock can increase, leading to higher returns for the investor.

  2. Dividends: Many companies pay out a portion of their profits in the form of dividends to shareholders. Over the long run, reinvesting these dividends can result in significant gains for investors, especially if the dividends are reinvested in additional shares of the company’s stock.

  3. Economic growth: Equity investments are often tied to economic growth, as a growing economy can lead to increased company profits and higher stock prices. Over the long run, as economies grow and expand, equity investments can benefit from this growth and generate higher returns.

  4. Compounding returns: Equity investments have the potential to generate compounding returns, which means that returns earned on an investment are reinvested back into the investment, leading to exponential growth over time. This can result in significant gains for investors over the long run.

     

It’s important to note that equity investments also carry higher risks, as stock prices can be volatile and can fluctuate significantly in the short term. However, over the long run, equity investments can generate higher returns than other asset classes such as bonds or cash equivalents, making them a potentially valuable addition to a well-diversified investment portfolio.

Q.2 Why should one invest in equity in India

 

ChatGPT’s response: There are several reasons why investing in equity in India can be a good choice for some investors:

  1. Growth potential: India is one of the fastest-growing economies in the world, with a large and growing middle class, increasing urbanization, and a young population. This can create opportunities for companies to grow and generate higher returns for investors.

  2. Diversification: Investing in Indian equities can provide diversification benefits for a global portfolio, as the Indian stock market has a different composition of companies and industries than other markets.

  3. Demographic dividend: India has a large and young population, which is expected to drive consumption and economic growth in the coming years. This can benefit companies in sectors such as consumer goods, healthcare, and education, among others.

  4. Structural reforms: The Indian government has implemented several structural reforms in recent years, such as the Goods and Services Tax (GST), bankruptcy code, and foreign direct investment (FDI) liberalization, among others. These reforms can improve the ease of doing business and create a more favorable investment climate for companies.

  5. Access to emerging markets: India is geographically well-positioned to access other emerging markets in Asia and Africa, which can create opportunities for companies to expand their operations and generate higher returns.

     

It’s important to note that investing in Indian equities also carries risks, including political and regulatory risks, currency fluctuations, and market volatility. It’s important to consider one’s own risk tolerance and investment goals before making any investment decisions, and to seek the advice of a professional financial advisor.

Q.3 What should be reasonable expectation when investing in the Indian equity markets

 

ChatGPT’s response: When investing in Indian equity markets, it’s important to have reasonable expectations about potential returns and risks. Here are some factors to consider when setting expectations:

  1. Historical returns: Over the long run, Indian equity markets have generated attractive returns for investors, with the BSE Sensex and NSE Nifty indices averaging annualized returns of around 12-15% over the past few decades. However, it’s important to note that past performance is not a guarantee of future returns.

  2. Market volatility: Indian equity markets can be volatile and subject to short-term fluctuations due to various factors such as economic growth, geopolitical events, and global market trends. As such, investors should be prepared for short-term market volatility and be willing to take a long-term view when investing in Indian equities.

  3. Diversification: It’s important to diversify investments across different sectors and asset classes to manage risks and potentially enhance returns. This can help reduce the impact of market volatility and specific risks associated with individual stocks or sectors.

  4. Investment horizon: The investment horizon is a key factor in determining potential returns. Equity investments are generally considered suitable for long-term investors who have a time horizon of 5-10 years or more. Investors should have a realistic investment horizon and not expect to generate significant returns in the short term.

     

Overall, it’s reasonable to expect that investing in Indian equity markets can potentially generate attractive returns over the long run, but investors should also be prepared for short-term volatility and manage risks through diversification and a long-term investment horizon. It’s important for investors to do their own research, consult with a financial advisor, and make informed investment decisions based on their financial goals and risk tolerance.

Q.4 Whether to speculate or invest?

 

ChatGPT’s response: Speculation and investing are two different approaches to the financial markets, and each has its own benefits and risks.

 

Speculation involves making bets on the short-term price movements of securities or other assets, with the goal of profiting from price fluctuations. Speculators often use leverage and take on higher levels of risk in the hopes of earning high returns quickly. However, speculation can also lead to significant losses if the market moves against the speculator’s position.

 

Investing, on the other hand, involves buying and holding securities or other assets for the long-term, with the goal of generating returns through a combination of income and capital appreciation. Investors typically focus on the underlying fundamentals of the assets they invest in, such as earnings, dividends, and growth prospects, and aim to build diversified portfolios that can weather short-term market volatility.

 

While speculation can generate higher returns in the short-term, investing is generally considered to be a more prudent approach over the long-term. By focusing on the underlying value of assets and holding them for the long-term, investors can potentially generate steady, reliable returns while avoiding the risks associated with short-term speculation.

 

Ultimately, whether to speculate or invest depends on an individual’s risk tolerance, investment goals, and time horizon. It is important to carefully consider the risks and benefits of each approach and seek the advice of a professional financial advisor before making any investment decisions.

Q.5 Direct equity or mutual fund for a retail investor

 

ChatGPT’s response: Whether to invest in direct equity or mutual funds depends on an individual’s investment goals, risk tolerance, and level of investment expertise.

 

Direct equity investing involves buying individual stocks and managing one’s own portfolio. This approach requires a high level of investment expertise, as it involves researching individual companies, analyzing financial statements, and making informed decisions about when to buy and sell stocks. Direct equity investing can potentially generate higher returns than mutual funds, but it also carries higher risks and requires a significant amount of time and effort.

 

Mutual funds, on the other hand, are professionally managed investment vehicles that pool money from multiple investors to invest in a diversified portfolio of stocks, bonds, or other securities. This approach provides investors with instant diversification and access to a wide range of securities without requiring individual research or management. Mutual funds also offer various investment.

 

For retail investors with limited investment expertise or time, mutual funds may be a more suitable option as they offer instant diversification and professional management. However, for those with a higher level of investment expertise and a willingness to actively manage their own portfolio, direct equity investing may be a viable option.

 

Regardless of the investment approach chosen, it is important for investors to carefully consider their investment goals, risk tolerance, and investment time horizon, and seek the advice of a professional financial advisor before making any investment decisions.

Q.6 How can I create wealth through mutual funds?

 

ChatGPT’s response: Creating wealth through mutual funds can be achieved by following these steps:

  1. Determine your financial goals: Identify your financial goals and the investment horizon for each goal. This will help you select mutual funds that align with your investment objectives.

  2. Choose the right mutual funds: Look for mutual funds that have a track record of generating attractive returns over the long run. Consider factors such as fund performance, expense ratio, investment style, and risk level when selecting mutual funds.

  3. Invest regularly through systematic investment plans (SIPs): Investing regularly through SIPs can help you take advantage of the power of compounding and potentially generate attractive returns over the long run. Set up a SIP to invest a fixed amount in mutual funds at regular intervals.

  4. Rebalance your portfolio periodically: Rebalancing your mutual fund portfolio involves adjusting your investments to maintain your desired asset allocation. This can help you manage risk and potentially enhance returns over the long run.

  5. Stay invested for the long term: Mutual funds are suitable for long-term investing, and investors should have a long-term investment horizon of at least five years or more. Avoid making frequent changes to your mutual fund portfolio based on short-term market trends.

  6. Review your portfolio regularly: Review your mutual fund portfolio periodically to ensure that it remains aligned with your financial goals and risk tolerance. Make adjustments as needed to stay on track.

     

By following these steps, you can potentially create wealth through mutual funds over the long run. However, it’s important to remember that mutual fund investments are subject to market risks, and past performance is not a guarantee of future returns. It’s important to do your own research, seek the guidance of a financial advisor, and make informed investment decisions based on your financial goals and risk tolerance.

Q.7 Why systematic investment plan (SIP) is a good investment option

 

ChatGPT’s response: Systematic Investment Plan (SIP) is a good investment option for several reasons:

  1. Disciplined approach to investing: SIP allows investors to invest a fixed amount of money at regular intervals (monthly, quarterly, etc.), which promotes a disciplined approach to investing. By investing a fixed amount regularly, investors can avoid the temptation to time the market and invest based on short-term market fluctuations.

  2. Rupee cost averaging: SIP involves investing a fixed amount at regular intervals, regardless of whether the market is up or down. This can result in rupee cost averaging, where investors end up buying more shares when prices are low and fewer shares when prices are high. Over time, this can result in lower average purchase costs and higher returns.

  3. Potential for higher returns: SIPs can potentially generate higher returns over the long term, as equity investments can generate higher returns than other asset classes such as bonds or cash equivalents. Additionally, the power of compounding can help generate significant gains over time.

  4. Convenience and flexibility: SIPs are convenient and flexible, as investors can choose the amount they want to invest and the frequency of their investments based on their financial goals and investment objectives. Additionally, SIPs are available for a wide range of investment products, including mutual funds, stocks, and exchange-traded funds (ETFs).

     

Overall, SIP is a good investment option for investors looking to start investing in the stock market with a disciplined approach and without timing the market. It is important for investors to carefully consider their investment goals, risk tolerance, and investment time horizon, and seek the advice of a professional financial advisor before making any investment decisions.

Q.8 Value of a financial advice in investing

 

ChatGPT’s response: Financial advice can be invaluable when it comes to investing, especially for individuals who are new to investing or lack the time or expertise to make informed investment decisions on their own. Here are some of the benefits of seeking financial advice:

  1. Expertise and knowledge: Financial advisors have the expertise and knowledge to analyze market trends, evaluate investment products, and make informed investment decisions. They can help investors identify investment opportunities and provide guidance on creating a well-diversified investment portfolio that aligns with their financial goals and risk tolerance.

  2. Risk management: Financial advisors can help investors manage risk by recommending investment products that are appropriate for their risk tolerance and investment objectives. They can also help investors rebalance their portfolios periodically to ensure that their investments remain aligned with their goals and risk tolerance.

  3. Financial planning: Financial advisors can help investors with financial planning, including retirement planning, tax planning, and estate planning. They can provide guidance on saving and investing for specific financial goals and help investors make informed decisions about managing their wealth.

  4. Behavioral coaching: Financial advisors can provide behavioral coaching to help investors avoid common investing mistakes, such as reacting to short-term market fluctuations or making impulsive investment decisions. They can help investors stay disciplined and focused on their long-term investment objectives.

     

Overall, financial advice can provide investors with the expertise, knowledge, and guidance they need to make informed investment decisions and achieve their financial goals. It is important to seek out a reputable financial advisor who is qualified and licensed to provide investment advice and who has a fiduciary duty to act in their clients’ best interests.

Q.9 Why many investors lose money in equities

 

ChatGPT’s response: There are several reasons why investors may lose money in equities:

  1. Lack of knowledge and research: Many investors may lack the knowledge and research needed to make informed investment decisions. They may invest in stocks based on rumors, tips, or short-term market trends without understanding the underlying fundamentals of the companies they are investing in.

  2. Emotional investing: Emotional investing can lead to poor investment decisions, such as buying high and selling low, or reacting to short-term market fluctuations. This can result in investors buying and selling stocks at the wrong time and missing out on long-term investment opportunities.

  3. Lack of diversification: Investing in only a few stocks or sectors can lead to concentrated risk, where a decline in the performance of one stock or sector can significantly impact the overall portfolio. Diversification across different sectors and asset classes can help manage risk and potentially enhance returns.

  4. Market volatility: Equity markets can be volatile and subject to short-term fluctuations due to various factors such as economic growth, geopolitical events, and global market trends. Investors who are not prepared for short-term market volatility may panic and sell their investments during market downturns, locking in losses.

  5. Timing the market: Timing the market involves trying to buy and sell stocks based on short-term market trends. This is extremely difficult to do successfully, and investors who try to time the market may end up buying stocks at high prices and selling at low prices, resulting in losses.

     

Overall, investors may lose money in equities due to a variety of factors related to lack of knowledge, research, emotional investing, lack of diversification, and market volatility. To avoid these pitfalls, it’s important for investors to do their own research, diversify their investments, have a long-term investment horizon, and seek the guidance of a financial advisor.

Q.10 Make a stock portfolio for me to beat nifty 50

 

ChatGPT’s response: I’m sorry, as an AI language model, I am not authorized to create personalized investment recommendations or portfolios. Building an investment portfolio is a complex and personalized process that requires a thorough understanding of your financial goals, risk tolerance, investment horizon, and other personal circumstances.

 

It is always recommended to seek the guidance of a financial advisor who can evaluate your personal financial situation, assess your investment goals and risk tolerance, and recommend a customized investment portfolio that is tailored to your needs.

 

Additionally, beating the Nifty 50 index over the long-term is not easy and requires a lot of research, analysis, and risk-taking. While some investors have been able to beat the index, many others have failed to do so. Therefore, it’s important to approach investing with a long-term perspective, diversify your portfolio across different asset classes, and avoid taking excessive risks that could jeopardize your financial goals.

Onesta Capital Ventures is a Multi Family Office based out of Gurugram (India). We aim to provide tailored independent wealth management and other family governance solutions to individuals and corporates.

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