Sale- 20% Discount- Hurry.
Sale- 20% Discount- Hurry.
Head- Client Advisory at SNMA Enterprise Pvt. Ltd.
If the same offer would have been made to you, for your most liked clothing brand OR for that matter your favorite gadget, you would have queued up for buying. Well, now if the same offer is applicable on your assets like stocks, MF’s or real estate, we prefer to run away or might even shut down the dialogue window. And yes, you heard it right, BSE Sensex is trading 20% cheaper than its all-time high of 30000.
Human psychology & perception defies some common logic under state of panic & fear. And this is exactly what happens when asset prices fall & they are available cheap, then it takes steely guts to enter in it OR hold it, however on the contrary when they are overpriced we herd it.hen its priced Rs 2000 OR when it trades at Rs 2500. The irony of Retail investors – they are too nervous to touch it at Rs 2000/- but when it peaks & is overvalued, we get lured by past gains and want to get in. But gentleman its late now.
Consider this: – Sensex traded at 8000 Levels in March 2009, blood was all across, discussing equities was a crime. Match that number with Today Sensex at 25000, even though its 20% Down from its all-time peak of 30000 in March 2015. So journey of 8000 (March 09) to 25000 (Dec 15) in 6.5 Years turns out to be staggering 18.35% compounded returns. Don’t Forget you double your money at 14.85% Compounded Returns in 5 Year, that’s the actual magic of compounding.
Now you are not expected to be a friend to a soothsayer OR have a Crystal ball which can actually predict when the markets will be at its lowest level. So even if you have missed 8k Sensex levels and would have entered at 10K levels, in 2009, through staggered/ Systematic investing you still stand today with an attractive 14.51% Compounded Returns. But if you panic, you miss the bus.
Excited!! Now this will be sheer Adventure for you. TCS from Lows of 2009 has given an Absolute Return 969% or 39% Compounded Returns, As on date (9th Dec 2015). Now this is a mind boggling number, but don’t be surprised to learn that most Sensex stocks & Mutual Funds have delivered similar 400% -500% Plus Absolute returns from 2009 lows.
ICICI Pru Value Discovery Fund –Retail- Growth – NAV on 6th March 2009 – Rs 14.87 / NAV on 9th Dec 2015 Rs 110.34- A Stunning Absolute Return of 642%.
Be patient. India’s growth story is intact, short term volatility will fade.
Stick to your Asset Allocation. That’s the foundation to all investing.
Initial Strategy is the key. Invest Right & sit tight.
Never invest in risky assets in one go. Stagger it.
Don’t Forget Periodic Portfolio Re-balancing.
And most Importantly be happy.