Came across this interesting chart
This adds on to this post I had created a while ago. Broader markets are going through a lot of pain and the falling Mutual Fund flows do seem to be a reaction to the pain. No matter what day and age, I guess retail investors will always buy high and sell low.
What do you guys think?
SIPs have an inherent flaw as there is no intelligence involved & the averaging math doesn’t help. So, that’s the reason you see most equity MFs failed to generate good returns even in past 5 yrs.
Now, many would argue & go back to 2009-2010 or 2014 when there are was a huge spike in markets which skew the entire stats but note that these are just outliers…if you understand statistics …do your data analysis.
Our fund managers have hardly beaten benchmarks to generate alpha…so a good equity strategy with index funds or ETFs can help you build your capital. I’m happy to have built decent returns & IRR using my strategy. This is just a food for thought…i would not react to criticisms. I’m not saying that you should all stop SIPs etc but would love to see any forum here for creative DIY strategies.
The inflows in Jan was higher compared to December 2018, and Mutual Funds were net equity buyers in 23 trading session for an amount of Rs 7,160.61 crore — as against net buying of Rs 2,918.97 crore in December 2018.
The top 30 large, mid and smallcaps bought & sold by MFs in Jan.
Most SIP investors set it up & forget. This helps AMCs, advisors etc to pocket regular money. Some investors who monitor their portfolio panic in such continuous market fall & stop SIPs…this is a regular phenomena. All ads on MF sahi hai etc have built the euphoria during market peaks & many are sitting on losses. As investors you need to understand the market dynamics & invest in quality stocks/index funds during such oversold territories, then book regular profits. This is the only mechanism which can deliver decent returns. I see that many who had invested in smallcase & other fancy products are all in shock as we see that more than 250 stocks have hit a new 52 week low on NSE (latest news).
How do you decide when to stop SIPs?
How do you define oversold territory?
I don’t do SIPs. rgds oversold…you can use indicators like william%r / stochRSI…split your amount & do a staggered buy/sell with stocks, ETFs or index funds & you’ll see how you can make money…!
Then how do you know they don’t work? Can you explain the basis of this statement?
Check actual SIP IRR in morningstar or check your own funds if you’ve invested for past 5 yrs & let me know what returns you’ve got with the risk you’ve taken.
I’m generating in access of 25% pa IRR using my switch strategy in index funds. With stocks it’s much higher…the funds you’ve chosen are still better than most which have given single digit/negative returns. Past 2-3 yrs are worse but don’t need to compare so much. My point is on risk-reward. Note that you can beat the yield of 12% even if you invest with much less risky assets. My investment is based on attached chart for my switch strategy in index funds.
I think you figured it out! Man, you must be really good at this.
Once investors learns active DIY strategies they would never get into SIPs…i’m sharing my experience & already a network of investors are gaining which i’m happy about. We should share such things on this platform for everyone’s benefit.
This indeed momentum following with index/etfs. can u share ur complete strategy?
