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Keeping pace with equity investing II

The golden bull run of the Sensex continued as it reached a new all time high of 38243 in Aug 2018.

Domestic Mutual Funds also continued their party time with AUM ( Assets under management) reaching record all time high of Rs 25.2 Lakh Crores , with Rs 1.75 Lakh Crore inflow itself coming in August 2018. Nevertheless the entire money doesn’t necessarily is a part of equity investment, but equity forms major portion from retail and small investors through the popular SIP route.

What makes me wonder is that bulk of these Small and retail investors are new to equity investing, and have never seen probably a bear market or prolong phase of degrowth or negative returns. This is worrisome fact , equity brokers or mutual funds have to first teach their investors to learn… “ how to look at their portfolio daily without worrying about the fluctuations in the screen “ , because probably no other investments is so transparent and gives a clear data about the value of the money on a daily basis. The small and retail investors have a tendency to develop cold feet when they see the value of their money dropping in short term, sometimes and forget the fact that they had agreed to invest for long term and had pledged to themselves that they will not be bothered by any short term negativity, hence a good education is essential before signing on the dotted line in the Cheque book for equity investors.

Further it’s the science of long term investing which will prevail and not some overnight unnatural profits gain , which will survive.

Investors need to be alert and knowledgeable and well educated about equity before deciding to invest.

We will see how investors should not get carried away only by looking at the Sensex and Nifty figures in our next and final part of equity investments.