A note from the founder - May 22

Look at the change in 5 months. It is significant.

There are a variety of reasons for this change – The impact of covid wave in Jan/Feb, Russia-Ukraine conflict, oil price rise, food shortages, general inflation high in US and India. Fed has increased interest rates indicating an end of ‘easy money’ made available. RBI has also raised repo rates once and will raise them again in June.

Few things to observe and do:

• Markets will rise and they will fall. This is their nature. We need not react strongly to either. Greed and fear are the twins that cause swing in both directions.

• Indian market has proven to be more resilient than the US market. Despite foreign investors removing Rs 200,000 crores from Indian markets in last 5 months, markets have not declined as much. In US markets, the tech stocks (represented by Nasdaq index and FAANG+ index) have declined more than the broader stock market (represented by S&P 500 index).

• Asset allocation is a must. Ultimately, a well-balanced portfolio is the only way to navigate uncertain and changing economic scenarios. We need to build an “all weather” portfolio that does well, whatever may be the economic conditions.

• Diversification is your friend. Choosing the right funds, stocks, or markets within allocated asset category, is a wise action. Diversification ensures that we don’t get wiped out with any one investment.

• We need to be calm, patient and carry on with our savings. What is important is we meet our goals on time. We do not need to be anxious or worry about how prices change on paper in the short-term.

Ultimate test of a good strategy and portfolio is - If someone asks us “Did you see what happened in markets today?” we should be able to answer – “Don’t know, and don’t care”.