In the month of Jan’18 through subject line Practical Insights write-up I reiterated to
follow asset allocation, not to get carried away by market euphoria and commitlargesums of money in investment products, particularly in PMS , mid and small cap fundsetc and not to invest just by seeing past performance of couple of year returns. Andsince last 9-10 months through mails and personal interactions, I’m advocating investinglump sum in debt and dynamic asset allocation equity funds while continuing SIP’s and
to trim down return expectation for a year or two.

And I thank you all for keeping faith and investing as advised. In the last 6 months the
mid and small cap funds given negative return in the range of 8-20%. And moreover
couple of them shown negative one year return. In direct stocks the fall in low quality
,poor governance stocks is more than 70-80% from their peak prices .

The key lesson one should keep in mind is not to look at couple of past years returns of
funds and stocks and invest without any due diligence.

Going forward one should continue to follow asset allocation and invest accordingly.
Continue SIP’s and keep investing in debt (become very attractive once again)

And for those who already had good exposure to equity and still want to invest
conservatively, then equity savings and dynamic asset allocation funds, and debt will be
the best. In the last 6 months they protected the downside and are flat to minor negative
of around 1-2%.

For couple of them we had booked partial profits in mid and small cap funds and the
current weights of the same is at reasonable levels based on your individual profile.
Further fall in the category makes it a good opportunity to increase allocation in
staggered manner.

And for those who already hold it before partnering with me, I had not given any fresh
exposure in the last 12-18 months

I try to keep in touch through my writings apart from personal interactions. And the
message always remains the same.

To summarize:
Think and invest for Long Term. Stay the course with patience and discipline.

Follow Asset Allocation religiously.

Do not chase the hot stocks, funds or themes.

Ensure proper diversification and an optimal exposure to equity based on your profile so
that, even when markets correct it should not disturb your night’s sleep.

Do not try to time the market and it is impossible to do so, rather time spent in the
market is more important.

Investing in equity funds or stocks is akin to investing in business. And by doing so, you
are becoming a part owner of the underlying businesses and getting benefit of their
growth in a passive manner.

Not to carried away by short term notional profits or losses, and staying put for long haul
to reap the real benefit of compounding.

Protecting downside is more important than chasing upside.

Hope you would also agree.