Elections were there 3 months prior to that, and we witnessed great run in that 3 month period. But since then, there is huge change. First came tariffs, then Israel-Hamas, and then US-Iran, which made Nifty consolidate first and then further lead to correction. Nifty in last years has given -11% returns. Some major indexes like Nifty Bank around 3-4% positive, but IT index 33% down. Surprised to see Midcap and Smallcap index at same levels. Some heavyweights at that time crashed upto 40-50% like ITC, TCS, Infosys. Other heavyweights like Bharti, ICICI Bank, HDFC Bank remain flat or negative retuns. On debt and gilt sector, GILT bees have given only 4.60% CAGR, mostly because of rally in March-May 2025, and becoming flat after that. Gold and Silver were performers, doubling or even tripling in case of SilverBees. 10 and 30 year yields were around 7% that time
But, the important question is that did anyone made even 7%. I myself invested 60-70% of my portfolio in gilt which is just like NPA for the last 1 year. Even, FD could have given better return. Another main thing is what lies ahead. I cannot see anything positive in the short term or even medium term. We don’t know how long till this war thing goes, there will be results season, US yields are breaking records. So, can we expect Nifty to remain 23-24K range for the next 3 or even 6 months? Gold and silver looks overvalued and became sideways now. Gilt also not looking very much positive either. The only advantage for Gilt is that it can be pledged with less hair and having soverign backing. FDs have fixed 6.4-6.5% returns, but the main disadvantage is that they cannot be pledged. Please share your views where you are investing now to get even 6.5-7% returns.
For investments, you have to let time work in your favor.
5-10 years is a realistic time horizon. Could be 20-30 years if there’s a Depression.
The bull run from 2020 is not the norm.
No one can time the market perfectly or predict which asset class is going to outperform.
Only solution is to diversify across debt, equities, and gold.
Exactly. This is the core point. Any investment need time, even FD, the interest you will get only after one full year. So you need to allow your investment time. The unfortunate thing about equitites, is since price is avaiable on a daily basis, everyone keep monitoring the same. In the last two years time frame, TCS had touched 4200 or so and now back at 2100 level. Asset Allocation is critical in my view, (FDs give 8.25% as well in Small Finance Banks) this will ensure that when stock price falls you can buy TCS at this level (example only). Same with HDFC it had gone up from 800 levels to 950 levels. Same with ITC, it had touched its peak.
The point being look at any of the chart of your invested companies for the last 10 years and see how it has grown. This is the time to buy, if you are convinced of the stocks. Not sure if you were invested in Corona time, it was falling daily, I started when Nifty was 7000 approx, when it touched 10,000 still remember Mr.Udayan Mukerjea of CNBC jumping and kissing the screen, when it touched 10000. Then creeped to 14,000 then corona hit and it fell back to 7000 and today it is 23000. Did the investor make money. Well you can decide.
Investing is for long term as others said. But that doesn’t make things easy. Its a weird time where larger the index, worse its doing. I dont think i have seen this before.
For debt, there is credit risk and also duration risk. So even though yield of 10y gilt now is 7% or so, if yields rise further you will initially get lower return. So again if you invested in long term gilt, its meant for long term. 2y gilt yield is aroun 6.3% right now. It will be less affected by yields increasing, but still could have some impact.
Floating rate funds and money market funds might give you around 7% returns today assuming things don’t change. They should not be sensitive to yields much ( floating by definition shouldnt be i think). Probably focus on funds with best credit quality.
Not sure about other options as short term yield is low, and long term debt could have interest rate risk. If interest rates go down ( seems unlikely), then gilt will make money and below will give lower rates going forward.
Example
icici floating rate fund direct - yield 7.5% ( you get this minus expense )
bandhan money market direct - Seems money market yield is lower than i thought, this says 6.69 %
But cant just zerodha tieup with a bank and allows FD as a colleteral. Because in next year or two, I still think FD will beat nifty or long term gilt. Atleast there will 6.5-7% fix returns plus additional gains in F&O on capital after pledging
It is accounting. It’s cash based accounting rather than accrual(mercantile) based accounting(Section 145). Problem is banks always do accrual based accounting and send data to itd. TDS is also deducted based on that. So there is work involved to carry forward TDS, and explaining mismatches between AIS, if questioned. But it’s completely legal(not a gray area). You should follow the same system regularly though and not go back and forth.
