AMIT MARATHE
Co-Founder, Wise Turtle LLP
India's large-cap stock index has doubled in the past 4 years. The EPS (earnings per share) has also gone up in tandem. Supported by lower leverage and improved earnings growth, the mid and small-cap indices have also rallied in "fast and furious" mode over the past 12 months.
In addition to earnings growth, the gush of continuous domestic liquidity, stable macros, political stability, government capex, better and improved performance of public sector companies, continuity of policies and reforms has led to a strong bull run in the Indian equity markets.
However, after a 4-year dream run, some segments of the market have become over heated. It is pertinent to pay attention to the below quote on risk given the pace of the rally.
"Actual risk is highest when the perception of risk is lowest and vice versa" As the markets reach new all-time highs, it is crucial for investors to reassess their current asset allocation. In most investment portfolio's the percentage of equity allocation has gone up. This can be attributed to both return contribution as well as fresh inflows which tend to follow asset classes with the best returns. The markets tend to suck in all excess liquidity during good times.
The Role of Asset Allocation in Investing
Asset allocation is more than just a buzzword in the world of investing. It is a key strategy that determines the long-term performance of an investment portfolio. While market timing and fund/security selection are often highlighted as drivers of success, the reality is that asset allocation plays a far more crucial role in achieving financial goals and mitigating portfolio volatility.
Role of different asset classes in Investments:
This story is from the September 2024 edition of Outlook Money.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the September 2024 edition of Outlook Money.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
Tax Reforms: What's In Store?
The government is working on reforming the existing Income-tax Act, 1961. The impending reforms have raised many questions in the minds of taxpayers. Will the old regime and deductions be done away with? Will it really simplify your life? What's the need for these reforms? We try to answer these and other questions regarding tax reforms
5 Questions That Will Lead You To The Right Financial Planner
Choosing a financial planner is not as easy as it may seem. Besides the right credentials, you should also consider things like the kind of services you will be needing-tax advisory, estate planning-as well as the fee structure. Here are five questions that will help you choose the right planner
Health Insurance Sub-Limits
Sub-limits in health insurance are restrictions placed by the insurance company on the SP maximum amount they will pay for specific expenses that are part of the total hospital bill.
Delayed Gratification, Humility, Understanding Inflation And Risks Key To Financial Success
The journey to financial success is continuous, requiring patience, education, and disciplined decision-making.
Avoiding Common Pitfalls through Asset Allocation and Multi-Asset Investing
Just as you track the calories and nutrients for a well-balanced diet, you need a balanced portfolio that has multiple assets to balance the risks and returns.
Mutual Funds for Financial Growth
Mutual funds allow you to invest in small amounts and seize the compounding growth, and experts help tackle volatility and asset allocation, making them a potent tool to create wealth.
Multi-Asset Investing is The Financial Equivalent of A Well-Balanced Diet
Just as you track the calories and nutrients for a well-balanced diet, you need a balanced portfolio that has multiple assets to balance the risks and returns.
Theme and Triumph: How Thematic Funds Can Boost Your Bottom Line
Thematic funds target high-growth opportunities in various industries and economic sectors, allowing investors to participate in future-focused segments to generate long-term returns.
Wealth Creation Through SIP - The Slow & Steady Road to Success
For investors seeking to create long-term wealth, SIPS are a powerful tool that enables regular, disciplined investments to generate compounding returns.
Tuition Fee Varies Among Countries
I am 22 years old and have recently started working in a software company.
