Market rout, what next?

Stock markets witnessed the worst week since the global financial crisis in 2008 as virus-related disruptions fueled fears of a recession in the US and Eurozone. Benchmark US indices S&P 500 and NASDAQ fell over 10%. While the speed of correction is scary, do note that this is not the first time this has happened. In fact, this is the 47th worst 6-day correction in the US Dow Jones index in its over 100+ year price history.

Of course, investors are asking what next? In a twitter poll we ran, while 35% of investors voted the time to buy the dip is now, around 39% of investors chose to SIP and chill.

We are big fans of sticking to your plan and your asset allocation. If your plan was to buy on dips, do that. If it wasn’t, don’t. Don’t buy on dips just because your friends are. Similarly, sell if you need the money for a planned expense. Don’t sell thinking you will be able to buy back lower, it is easier said than done. In short, no one knows how this will actually play out. So keep it simple.

We have written previously on how to manage emotions during market turmoil, you may want to read that again –

• In investing the simplest things are the hardest
• 3 ways to make sure this stock market correction is not wasted?
• How to Manage Expectations For Higher Returns?
• How To Survive a Volatile Equity Market?
• What makes a great investor?

 

 

Gold is up over 10% in 2020 thanks to risk aversion due to coronavirus. Gold prices hit a record high in India this week, as Gold is an effective portfolio diversifier in times of crisis, besides being a shield against inflation and a lender of last resort during economic uncertainties. All top 5 best performing funds this week were gold funds. Our founder and CEO Gaurav (@rustapharian) spoke with CNBC-TV18 about investing in Digital Gold.

 

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Index Returns Index 1W 1Y 3Y NIFTY 50 -7.3% 3.8% 8.1% NIFTY NEXT 50 -7.6% -0.1% 2.7% S&P BSE SENSEX -7.0% 6.8% 10.0% S&P BSE SmallCap -7.0% 0.1% 0.0% S&P BSE MidCap -7.0% 2.0% 2.5% NASDAQ 100 -10.4% 19.2% 16.7% S&P 500 -11.5% 6.1% 7.7% Source: BSE / NSE

 

Top 5 best performing funds Name 1W 1Y 3Y Kotak Gold 2.9% 28.6% 12.3% IDBI Gold 2.3% 25.8% 10.6% HDFC Gold 2.1% 25.8% 11.6% Axis Gold 2.0% 26.5% 11.6% SBI Gold 1.9% 27.5% 11.9% Source: Kuvera.in

 

Top 5 worst performing funds Name 1W 1Y 3Y Nippon India US Equity .. -12.6% 9.1% 15.0% DSP World Energy -11.8% -11.4% -2.0% Invesco India Feeder Global E… -11.6% -1.4% 5.6% Franklin India Feeder US Opp… -11.3% 13.3% 16.6% HSBC Brazil -10.5% -10.0% 2.0% Source: Kuvera.in

 

What Investors Bought We saw the most inflows in these 5 Funds – Name 1W 1Y 3Y Axis Bluechip -5.2% 19.7% 18.0% Parag Parikh Long Term Equity -7.0% 9.1% 11.4% Axis Focused 25 -5.6% 19.9% 15.9% Kotak Standard Multicap -6.8% 10.2% 9.8% UTI Nifty Index -7.3% 4.8% 9.2% Source: Kuvera.in

 

What Investors Sold We saw the most outflows in these 5 Funds – Name 1W 1Y 3Y Nippon India Arbitrage 0.5% 7.3% 7.0% HDFC Hybrid Equity -5.3% 4.7% 4.8% L&T Emerging Businesses -6.0% -4.9% 4.1% ICICI Prudential Equity Arbitrage 0.4% 6.6% 6.6% ICICI Prudential Value Discovery -7.3% -0.3% 2.7% Source: Kuvera.in

 

Most Watchlisted Fund Top 5 funds added to watchlist by Kuverians Name 1W 1Y 3Y Axis Bluechip -5.2% 19.7% 18.0% Axis Focused 25 -5.6% 19.9% 15.9% Axis Long Term Equity -5.7% 19.0% 15.3% SBI Banking & Financial Services -5.4% 22.2% 18.6% Mirae Asset Emerging Bluechip -6.4% 14.8% 12.1% Source: Kuvera.in

 

Top ELSS funds Name 1W 1Y 3Y IDBI Equity Advantage -4.7% 10.7% 9.8% Motilal Oswal Long Term Equity -5.0% 17.8% 11.0% Parag Parikh Tax Saver -5.1% NA NA Aditya Birla Sun Life Tax Relief96 -5.1% 5.7% 10.1% BOI AXA Tax Advantage -5.2% 23.9% 13.3% Source: Kuvera.in

 

Movers & Shakers

1/ Aditya Birla Sun Life Mutual Fund has announced that Claude A Accum has ceased to be an Associate Director of Aditya Birla Sun Life AMC Limited with effect from 24 February 2020.

 

Quote of the week:

 

 

But the world is ever more interdependent. Stock markets and economies rise and fall together. Confidence is the key to prosperity. Insecurity spreads like contagion. So people crave stability and order.

: Tony Blair

 

 

Interested in how we think about the markets?

Read more: Zen And The Art Of Investing

 

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