Newsletter | Sep 2023
Market overview of last month?
The Nifty 50 index touched the month's high at 19,795?and the month's low at 19,223 (last month was 19,991 and 19,234 respectively). The?index has shown a small but steady decline through?the month.?Several sectors were affected during the?month,?including financials, IT and oil shares. This was due to concerns about?potential interest rate hikes and the overall weaker trend in global markets.?The global markets had mixed performance. Initially, they saw an uptick,?influenced by a positive Wall Street rally?driven by reports of positive?consumer confidence and job openings. However, European stocks experienced a?decline due to inflation concerns in the euro region. It is expected that Indian?equities will influenced by developments in the US. Weaker jobs data?and?falling consumer confidence in the U.S. led to speculation that the U.S.?Federal Reserve might consider pausing its policy changes. On the domestic front,?market participants are closely watching the release of GDP (Gross Domestic?Product) data, which?was expected to remain strong. Strong GDP data can bolster?investor confidence.
What can equity mutual fund investors do? Our stance remains the same as last month?- Market rallies can be followed by periods of volatility or market?corrections. Hence it is crucial to have a long-term perspective, stick to your?investment strategy, and avoid making impulsive decisions based solely?on?short-term market movements. For investors who prefer a disciplined approach,?continuing with a systematic investment plan (SIP) can be advantageous. SIPs?allow for regular investments at predetermined intervals, helping to average?out the impact of?market fluctuations over time. It can be challenging for?investors wanting to invest a lump sum so researching and identifying potential?funds that align with your investment goals and risk tolerance is critical. You?can also consider diversifying your investment?across multiple funds.
What the rise and fall in tomato prices means to you The price of tomatoes went up to over Rs 120 or more?per kg in Jul / Aug from an average of Rs 30 – Rs 40 per kg. This was due to?sudden short supply, caused by unseasonal rains damaging?the crops. As a?consumer you would have fallen into one of three categories – 1) you have high financial?stability, the price hike was a minor inconvenience, and you continued to use?tomatoes as?usual.2) you tried to make adjustments and told your cook to use?fewer tomatoes in sambar and salads but didn’t really enforce it 3) to balance your?budget in the face of steep prices, you had to?significantly cut back on tomato?purchases, potentially affecting overall dietary choices. But it did not affect?your life radically. Thankfully, the price is now down to below Rs 50 kgs and?steadily?declining. What if the prices of all vegetables followed a relentless?upward spiral? Or, even more crucially, what if this situation extended to an?essential resource like water? These questions?highlight a genuine risk in our?financial planning. Our financial strategies are based on current expenses,?anticipated requirements, and historical inflation data. However, we must also?acknowledge the existence of unpredictable factors that can disrupt our plans.?This is where real risk management comes into play. To mitigate such risks,?consider diversifying investments,?creating flexible budgets that can adapt to?changes in expenses, developing financial scenarios that account for unexpected?events and staying informed about market trends and factors that?could?influence your financial situation.
Chandrayaan-3 and the savvy investor India's successful moon?mission was a big achievement for ISRO, making us all feel proud. As you can?imagine, the development and execution of a lunar spacecraft involve a wide?range of?hardware and software components, as well as contributions from?various companies and organisations. While ISRO plays a central role, the?mission's success relies on collaboration with?numerous public and private?entities. You might have seen some memes and social media posts claiming?certain companies are involved in missions like Chandrayaan 3 and suggesting?you?invest in them. Finding out which companies did what can be tricky because?of complicated supply chains, partnerships, and secrecy in the aerospace?industry. After identifying these companies,?there's a lot of research to be?done.?Once you've identified these?companies involved in missions like Chandrayaan 3, the next step involves?delving into in-depth research. This research entails examining their roles,?the impact of their technology on the success of these?missions and current and?future earnings. For regular investors, picking individual stocks can be risky.?It means putting your money into just a few companies, which can be a problem?if one of them doesn't do well. It also requires a deep understanding of the?stock market and can be influenced by emotions and outside factors, making it?even more complex. In contrast, mutual funds offers professional management.?These experts spread the money across different companies and sectors to reduce?risk. This?diversification can help keep your investments steadier and protect?you from big ups and downs in the market. So if you're not confident in stock-picking, especially in companies linked to ISRO's space program, then you may find the mutual fund route to be a more suitable investment approach, just like I do.
Our latest video series – “Investing As A Couple” We’ve put up four episodes that dive deep into?important aspects of managing finances as a team. From aligning your goals and?dreams as a couple, understanding the vital role of insurance and?managing?joint goals, we cover it all. We believe these insights can make a significant?difference in how you and your partner approach your financial journey. To?watch these informative videos,?just head over to any of our social media channels.?We're excited to have you join us on this journey toward financial empowerment?and building a strong financial foundation as a couple.
That’s all, folks. Have a great month ahead!
Disclaimer?- Mutual Fund investments are subject to market risks, read all scheme related documents?carefully.?