The silver lining is the fall in interest rates, not just in India, but in rest of the world as well. Unfortunately, for Indian corporate and borrowers, the transmission hasn't really happened. While it is difficult to predict when we will see a recovery or when the market will bottom out, we believe that next three quarters will see heightened volatility. Usually, in such times, people lose patience. This is natural when your investments are not giving good returns and the outlook is gloomy. Typically, in these times if you hold on to your conviction, you will make money. We advise investors continue in a systematic and disciplined way rather than coming in lumpsum. The valuations are attractive at this point, but the choppiness may continue. The steps taken by the government are welcome, but it is going to be a slow grind. We can't expect everything to turn around in months. Gopal Agrawal, senior fund manager and head of macro strategy, DSP Mutual Fund Market is actually pricing in a recovery both in growth and earnings.
Saudi Arabia's facility generates 5 per cent of the world's crude oil supply. Some market participants believe that if the geo-political tensions increase, the crude oil prices might rally from here. "Crude oil has a bearing on India. It is the single largest imported product by India. If the prices go up, we will face troubles in the economy. All this might lead to an adverse impact on the equity market as well, " says Chirag Mehta, fund manager- alternative investments, Quantum Mutual Fund. With rising crude oil prices, the yields also inch up because of expectation of inflation, a pause of rate cuts etc. The 10-year G-sec went up to 6. 75 per cent on Monday morning. The yields have come to 6. 70 per cent by afternoon. Rise in yields have an adverse impact on long duration funds. "The yields have gone up but they haven't materially inched up. That is only feel good factor at this point. The 10-year bond yield went up to 6. 75 per cent in the morning today. It was trading at around 6.
Investors poured money into equity mutual fund schemes in August as falling stock prices encouraged them to increase bets on the market. Arbitrage and liquid funds too witnessed inflows after risk-averse investors shifted money from credit risk funds. Equity schemes attracted Rs 9, 152 crore in flows in August compared to Rs 8, 112 crore in July. Within equity mutual funds, investors put Rs 2, 583 crore in large cap funds, Rs 1, 581 crore in multi cap funds, Rs 1, 068 crore in mid cap funds and Rs 1, 307 crore in small cap funds and Rs 795 crore in focused funds. Mutual fund industry officials said the sell-off in the stock market, which eased share valuations, prompted investors to put in money into the schemes. From the Union Budget on July 5 till August 31, the benchmark Nifty has fallen 7. 7 per cent. "The Nifty is trading at a discount to its fair value, which indicates that valuations are attractive now, " says G Pradeep Kumar, CEO, Union Mutual Fund. Flows into equity mutual funds through systematic investment plans (SIPs) slowed to Rs 8, 230 crore from Rs 8, 324 crore in July.
Next, you should increase your investments every year in line with your salary increase. You have also chosen large round figures like Rs 1 crore, etc, for your future financial goals. This is a wrong approach. You should always try to work with some real numbers, include inflation and taxation to reach a realistic target. For more, read: Rs 1 crore or Rs 2 crore? Use real numbers, inflation, taxes for realistic retirement corpus Rs 1 crore or Rs 2 crore? Use real numbers, inflation, taxes for realistic retirement corpu... Real numbers? What is that? You are creating a retirement corpus to draw a regular income to take care of your living expense after retirement. So, you can take your current annual living expense and inflate it for every year to find out its future value. Once you know this, you can calculate how much corpus do you need to generate the income at a modest rate. An equity investor with a moderate risk profile is typically asked to invest mostly in multi cap schemes. The investor may also invest in large cap schemes if s/he wants to diversify to reduce the overall risk in the portfolio.