Tuesday, March 14, 2017

NIFTY TOUCHES ALL TIME HIGH....BUT RETURNS IS 1% CAGR IN 2 YEARS....



Two years before for the first time Nifty was closed at all time high on 3rd March 2015 as 8,996 and today again it is closed at 9,087 which is all time high as far as today is concerned. We are in a structural bull market and surpassing all time high, going forward is a new normal!
In other words, Nifty crossed the same level exactly after 2 years. 1% returns in the last 2 years!

Nifty on 14th March 2017
  9,087
Nifty on 3rd March 2015
  8,996
Total Returns
1.0%
Total Months
24
CAGR
0.50%

The typical investor’s reaction today is market is all time high and we should wait for the market to correct to invest further. Market is like GOD and nobody can predict  in the near termWhen you believe GOD, you will be blessed over a period of time, like that when you stay invested in the markets; investors will be rewarded handsomely, no doubt!

Majority of the investors fails to understand one thing that their portfolio is already into the market tunes, for the investment of additional 3 to 5% of newer investment they keep waiting for the markets to fall, even if somebody timed it perfectly also (It is highly difficult) what impact it is going to improve overall portfolio.

Nifty fell nearly 1500 points between 3rd March 2015 and 3rd March 2016 (8996-7475). It is one of the best time to enter the market, how many invested, very few. Either no money or no conviction!

Nifty on 3rd March 2015
   8,996
Nifty on 3rd March 2016
    7,475
Total Returns
-16.9%

On 25th February 2016 nifty closed at 6,970 which is the recent bottom. Everyone is expected nifty to touch 6,500 and it never happened.

The beauty of human mind is when it falls everyone will have their own expectation of fall and if it met quickly, then they think we should wait little more time probably our expectation is not right. If it is not falling, then they will keep waiting for the level to happen, will never happen!

On 21st November 2016, NIFTY again closed at 7,929 mainly due to demonetization event and everyone expected market to correct 7,500 levels and the market has crossed 9000 level.

8th January 2008 market closed at 6,287 and today it is 9,087. When it comes to CAGR it is only 4% and absolute returns it is only 45% in 9 years plus.
Nifty on 14th March 2017
   9,087
Nifty on 8th January 2008
   6,287
Total Returns
44.5%
Total Months
110
CAGR
4.03%

The best way to understand whether the market is high or not is to understand how the market has moved to this level, which will give the better picture.

We were never short of news and events in the past and equally or more events and news are going to unfold in the future as well. If we keep focusing on each and every event, for our investment decision we will never make any money. Investment is long term; today may be all time high and in the next 3 years plus time we will see much higher level than what we have witnessed today!

The best way to create wealth is keep investing your long term money as and when you keep getting it. If you do not get any money to invest enjoy the bumpy ride.
 Please note : From 3000 to 21000 levels in Sensex between Jan, 2003 and Jan 2008 market has corrected nearly 13 times more than 10% and two times more than 20%. Markets fall and rise are very quickly and it will not allow the individual to think and act. If somebody knows the past, they will not time the market and stay invested and keeps investing their surplus to capture this Bull Run. Life is full of choices, if we have not stay invested for the next 10 years and I can guarantee you one thing that you as an investor will regret forever!!!
No automatic alt text available.

The gist is....DO NOT WAIT FOR THE MARKETS TO FALL/RISE...
If you have got time horizon....just go ahead and invest
If you have achieved your goal....just go ahead and redeem....
Waiting for the right time to invest is wait forever




Thank you dear Padmanabhan Balasubramanian (foundly called Paddu.....my CFP friend from Chennai of fortune planners) for amazing inputs


Also visit http:/http://goodinsuranceadvisor.blogspot.in/

No comments:

Post a Comment

Translate