Markets at New High

Markets have started hitting new life highs. However, given a choice I would like to start selling out of the majority of my Pre-Covid held/ theme MF schemes if still held, today and redeploy into Post Covid Investment Instruments and Mutual Funds
Why?
  • Vaccine news is out. However, euphoria may fizzle out soon as news already seems to be priced in/ or will get priced in soon and people will start finding faults with the vaccine and associated logistics.
  • Majority of global indices have hit their new 52Weeks high
  • After hitting life highs US mkts(Nasdaq) actually came down yesterday and futures as of now trading in negative(Important data point but it has no consequence for investors).
  • Derivatives data moving towards my uncomfort(Data important only for day traders)
  • Mkt likely and should to start exhibiting distribution soon.
  • Not that mkt will not rise up from here In all probability mkt will keep going up. But that doesn’t necessarily mean that NAVs of your funds will also rise with mkt. And focus should start shifting towards broad mkt
  • In the current upmove, Number of investors going through FOMO(Feeling of missing out) and sitting on sidelines is much more than the Nos that could make substantial gains. And this is in spite of the huge number of Abhimanyu’s(First time stock traders) that entered the mkt through millions of new Demat/ Trading accts opened since Mar2020.
  • It should, therefore, be the best time to rebalance portfolios(Iif not already done) and shift towards broad mkt type of instruments, re-strategise and realign to the changed mkt structure and realities in a planned and gradual manner.
  • Since your funds are now likely to be in gains. By redeeming your MFs, you can set aside your losses/ utilise LTCG for tax optimization and/ or to reduce tax liability.
  • Also, redemption now will enhance your confidence in mkt instruments as it will dispel the wrong notion that investors carry that MF gains are notional and not real. But for that you and/ or your advisor should know when and how to exit/ enter and have some strategy and not look at MFs as a product but MF investment as a wealth creation solution

Point to Ponder If due to Covid-19 our life normals have changed and we no longer assess our work/ surroundings/ each other with the previously held norms/ scales and tools. Therefore, is it correct to keep assessing the mkt behaviour and/ or levels with the previously observed/ defined or designed tools, scales/ methods?!?

Looking forward to comments including the critical ones so as to Learn and Evolve

At the same, please contact, if you you want me to

  • Help you in balancing and actively manage your already held MF/ stock portfolios .
  • Aligning your Investments with your specific financial goals, risk profile and Investment horizon.

And Let’s grow Together

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