[blackstallion76]

Even today both Sensex & Nifty were down. Its been the worst July month.
What is triggering this reaction in the market?
Is this related to the FDI Super-rich tax issue. Or the general slow down impact.
All my MFs are showing -ve. Not sure if I have to redeem now or wait for market to pickup.

[karanraheja]

Originally Posted by blackstallion76

Is this related to the FDI Super-rich tax issue. Or the general slow down impact.

A mix of both . Slow down has been worldwide and US- China trade war isnt helping .

Originally Posted by blackstallion76

All my MFs are showing -ve. Not sure if I have to redeem now or wait for market to pickup.

I would suggest you stop watching the portfolio on regular basis. Selling now in loss does not make much sense. Things should improve maybe in next few months. Hold on and wait for better days ahead !

[sgiitk]

I am told that the indices may have another 5% to drop - at least. So hold your horses. Wait for some stability.

[srikanthns]

Originally Posted by blackstallion76

All my MFs are showing -ve. Not sure if I have to redeem now or wait for market to pickup.

Redeem! Worst thing to do in a downturn. Would request you to be a contra investor. Pl put in money which you may not need for 3 years now in your existing MF portfolio. STOP Watching business channels for now. STOP monitoring your portfolio on daily basis. Look at portfolio after 6 months and then afterwards probably once in two months

[Kulin_Shah]

Originally Posted by blackstallion76

Even today both Sensex & Nifty were down. Its been the worst July month.
What is triggering this reaction in the market?
Is this related to the FDI Super-rich tax issue. Or the general slow down impact.
All my MFs are showing -ve. Not sure if I have to redeem now or wait for market to pickup.

More pain will come. In this situation fill it & forget it - buy more on downside, and forget about them.

[SoumenD]

Was reading about 15*15*15 thing a while back. Was wondering if it actually worked for anyone here as I see we have a lot of long term MF investors?

Back in 2007 I did start with SBI magnum taxgain with a small amount. Had invested 30k in 1st year for tax purpose and forgot about it. Used to get dividend around 1.5-2.5k once annually every year. Around 10 years later i.e. 2017 when I redeemed it, I got back only 26k. Looking at that am wondering if long term really is as profitable as it's being marketed lately?

Only 2 years back I started seriously investing in MFs for retirement & after some basic research went in for 4 funds investing 25% of the decided amount in each. Portfolio being :

1. 2 blue-chip funds(SBI & ICICI) : both in -ve currently(-1% to -2.5%)
2. 1 hybrid fund (HDFC) : Only one in positive but barely(+2% maybe)
3. Small cap. L & T emerging fund : This one's bleeding bad(-15%)

Am not in a hurry to liquidate but keep wondering if I would end up loosing precious time and money waiting for these MFs to show positive growth. Specially the small cap one, am planning to wait till end of this financial year & if it still continues the free fall I will not renew the SIPs in that anymore and will divert its share to the hybrid or large cap fund. Won't liquidate it , but won't invest any further. Would appreciate suggestions from the experienced folks here?

TIA!!!

[poloman]

I had written about the folly of expecting long term gains from the market especially small and mid cap funds few pages back. Lot of people are now trying to average out by buying on the downside. This can prove disastrous. There is a major issue of corporate governance in these companies and lot of them can bite dust and end up as penny stocks. Global trade wars and internal slowdown are not helping as well. People have lost crores of hard-earned money in some reputed PMS which followed this strategy.

One should keep the expectations down. If you can't beat FD returns even over a period of 10 years, I don't think it is worth taking all this risk. Some had questioned that you cannot cherry pick a particular 10 year period, but that is not what experts were suggesting. MFs and market investments should provide much better returns anything over a period of 5 years. No matter how you pick this window.

[saket77]

Originally Posted by SoumenD

Only 2 years back I started seriously investing in MFs for retirement & after some basic research went in for 4 funds investing 25% of the decided amount in each. Portfolio being :

1. 2 blue-chip funds(SBI & ICICI) : both in -ve currently(-1% to -2.5%)
2. 1 hybrid fund (HDFC) : Only one in positive but barely(+2% maybe)
3. Small cap. L & T emerging fund : This one's bleeding bad(-15%)

Am not in a hurry to liquidate but keep wondering if I would end up loosing precious time and money waiting for these MFs to show positive growth. Specially the small cap one, am planning to wait till end of this financial year & if it still continues the free fall I will not renew the SIPs in that anymore and will divert its share to the hybrid or large cap fund. Won't liquidate it , but won't invest any further. Would appreciate suggestions from the experienced folks here?

Unfortunately, the markets have been bleeding since almost 1.5 years now, if you leave some positive spurts. But given the valuation of mid & small caps now, I am inclining towards them now; more for mid caps. During the bull phase, mid/ small caps mostly gain quite fast but in a bear phase, the reverse is also true as the ones that bleed most are mid caps & small caps only. If seeking a balanced and safe equity portfolio, large caps are the way to go as their gains and losses, both are tepid in nature compared to other caps.
Coming to your plans, if your situation allows, I would say that this is the time to invest in mid caps; if not small caps. I have myself started a new investment in a mid cap fund since I believe that mid caps now have fair valuation and they can give good returns during the market recovery phase which should be next 1-2 years. Many AMCs are also launching NFOs on the mid cap theme which will further spur the demand of these stocks. Personally, I am still little hesitant for small caps though. So, my advice is to keep investing in a fund that has the flexibility of investing in mid + large caps so that in bear phase, the fund manager has the cushion of large caps to fall back upon by shifting the AuM rather than getting tied by the fund's mandate of only a mid or small cap fund.

Regards,
Saket.

[carboy]

Originally Posted by saket77

I believe that mid caps now have fair valuation

The Nifty Midcap Index currently has a P/E of around 30. While the Nifty 200 & the Nifty 500 have a P/E of around 29.

[saket77]

Originally Posted by carboy

The Nifty Midcap Index currently has a P/E of around 30. While the Nifty 200 & the Nifty 500 have a P/E of around 29.

Yes, Nifty MidCap 100 has a valuation of ~29 in terms of PE and historically, this is a fair valuation as per my analysis when coupled with other factors including liquidity among other parameters.

I am not too inclined towards small caps due to my personal investment philosophy.

[rovingeye]

Originally Posted by saket77

I have myself started a new investment in a mid cap fund since I believe that mid caps now have fair valuation and they can give good returns during the market recovery phase which should be next 1-2 years.

Hey Saket - What mid cap fund have you zeroed in on? Could you please share with us?

[hothatchaway]

Originally Posted by SoumenD

W
Back in 2007 I did start with SBI magnum taxgain with a small amount. Had invested 30k in 1st year for tax purpose and forgot about it. Used to get dividend around 1.5-2.5k once annually every year. Around 10 years later i.e. 2017 when I redeemed it, I got back only 26k. Looking at that am wondering if long term really is as profitable as it's being marketed lately?


TIA!!!

Seems like this was the dividend option. You seem to have got back 26K + 25k~ worth dividend or 51k total. This works out to ~5% RoR compounded over 10 years. I checked the SIP return calculator on VR for SBI Magnum and it shows almost 10% return over the same period. Did your return suffer because you opted for dividend option over growth? Also

Worth rechecking the numbers.

[saket77]

Originally Posted by rovingeye

Hey Saket - What mid cap fund have you zeroed in on? Could you please share with us?

Hi. I have recently included Mirae emerging Bluechip (large + Mid cap) and the recently launched Mirae MidCap fund. Mirae MidCap fund is one calculated risk that I have taken if you ask me honestly since the fund is new but let it due to my gut feeling.

I will monitor both the funds for some time and take further investment decisions of increasing/ decreasing allocation.

Regards,
Saket.

[ghodlur]

Originally Posted by rovingeye

Hey Saket - What mid cap fund have you zeroed in on? Could you please share with us?

If you are looking for a midcap fund then I would suggest to check out the Axis Mid Cap Fund. The bleeding in this fund has been very minimum in the present scenario when compared to its peers whereas the returns during good times have been at par with the peers. This is based on information available in valueresearchonline.

https://www.valueresearchonline.com/...hemecode=15690

Any experts could support the above?

[bullrun87]

Originally Posted by ghodlur

If you are looking for a midcap fund then I would suggest to check out the Axis Mid Cap Fund. The bleeding in this fund has been very minimum in the present scenario when compared to its peers whereas the returns during good times have been at par with the peers. This is based on information available in valueresearchonline.

https://www.valueresearchonline.com/...hemecode=15690

Any experts could support the above?

Axis midcap and franklin prima usually maintain a higher allocation to large caps than peers. Axis mutual fund is also holding about 15 percent in cash. Both these have average market cap in excess of 20000 crores. This implies they also have the lowest beta and standard deviation in the category and hence are the least risky. I like funds that contain downsides well. Both these are good choices in the mid cap category.