In Aug’17 when markets are in euphoric state wrote a mail titled “Where to Invest” emphasizing the importance of asset allocation,how rising market movement should not dictate your investment objective and rather focus should be on protecting the downside rather than aiming for higher returns.

Since then main indices Sensex and Nifty are in and around same range with the support of 4-5 index heavyweight stocks, but majority of the stocks from broader market witnessed good amount of correction. To put it in numbers close to 25 lakh crore market cap eroded from the peaks.

No asset class or investment has the birthright of a high return. It’s only attractive if it’s priced right.-Howard Marks

Those who entered at peak of the markets particularly in small and midcaps have experiencing one year losses ranging from 10-20% plus and 2-3 years returns are not commensurate to the risk taken in such kind of funds.

Due to unfavourable valuations we did not invested into any such category in the last 2-3 years. Only SIP and STP’s are running in multicap funds and lump sum invested in equity savings, debt, dynamic asset funds,which helped to ride out and protected the capital.

Though debt markets witnessed high volatility in the last one year or so, they are better off (barring couple of instances which i shared due to IL&FS MTM loss,where some resolution expected in the coming months.)

And even now with high yields, it remains a great asset class to earn better post tax return compared to traditional avenues and helps to balance the portfolio.

“Over short time increment, one observes the variability of the portfolio, not the returns.”- Nassim Taleb

Though repetitive i re-emphasize not to be worried and carried away with notional or flat returns particularly for those who started last couple of years back. It is a good opportunity you are investing at lower levels through SIP,STP. One need to utilise such opportunities and top up the exposure to equity in staggered manner.

Keep in mind and digest the fact that markets will not move in linear fashion. There will be phases when markets fall and move sideways for a very long time, which tests your patience. However one need to be discipline and stay put with proper asset allocation in place in order to create wealth from equities.

“The biggest thing about making money is time. You don’t have to be particularly smart; you just have to be patient.”- Warren Buffett