Currently equity markets witnessing correction due to global and domestic news flows. Global reasons like ongoing trade war between US and china is putting pressure globally on all the markets.

However this time major contribution to correction coming from domestic factors like slowing economy, lack of corporate earnings and FPI taxation issues.

Bellwether indices Sensex and Nifty don’t reveal much due to polarized performance by handful of names. Whereas broader markets witnessed good amount of correction factoring the above mentioned reasons.

As usual I reiterate not to focus on short term market movements. Correction in markets is its inherent nature, which is not in our control. What we can control is Asset Allocation, discipline, Patience. Times like these provide better opportunities.

And coming to give further clarity on your portfolio’s as you are aware, that we are not invested in any mid and small cap funds since last 3-4 years. And incremental money since last couple of years is getting invested in debt, asset allocation funds due to unfavorable equity valuations.

The advantage of investing in debt and asset allocation is explained in earlier mails and in personal interactions.

Some of you are started investing through SIP’s only since couple of years. The last couple of year returns are not good. I would like to reiterate one important thing about SIP’s. It is a process of investing which inculcates discipline to keep aside your savings, eliminates emotions of greed and fear towards investing and participate in up and down cycles and reduces volatility and helps to reap the benefit of long term equity investing.

As the popular saying goes “Every drop makes an ocean”, SIPs exhibit it.

Following an asset allocation gives strength to withstand times like these, as mark to market losses in highly volatile equity asset class get partial offset by other conservative allocations.

The key emphasis of my investment strategy is more on protecting the downside rather than chasing the upside.

For some of you we are deploying the investments from liquid funds in staggered manner to take the advantage of the market weakness.

Need to see action from government to arrest the slowdown and sorting out other issues on FPI taxation simplification of GST etc.