“Investing is a popularity contest and the most dangerous thing is to buy something at the peak of it’s popularity.”- Howard Marks
Howard Stanley Marks is an American investor and writer. Mr. Marks is a Cofounder and Chairman of Oaktree Capital Management. This gentleman writes so well that I look forward to his memos hitting my inbox with an eagerness of a small child. But why I am suddenly speaking about Howard Marks and his company, Oaktree Capital.
Well as the aftereffect of #Demonetization and #Trump Government our markets yesterday hit the CY 2016 lows. The markets closed at almost the same levels as the ones witnessed post #Brexit in July this year.
Equities have turned unpredictable and volatile(which they always are), G sec is trading at a yield of 6.5. Where to put your money now? This is a classical phase of the market when your patience is tasted and your conviction matters. Here is a time to go and meet your financial advisor and review your plan.
My advice would be to stay calm and not to panic. Please go back to your financial goals, if you find them to be at least 8-10 years away; PARTY HARD. 😍😎🍷 This is a great opportunity to accumulate equities as your asset allocation would have been affected due to fall in the markets over last few months. I personally don’t see markets moving before Union Budget due on 1st of Feb next year. Use falls above 1% to put lump sum money that you don’t require for next 8-10 years. In debt mutual funds, most of the rally has already been priced in so unless your horizon is more than 3 years avoid duration calls. Dynamic bond funds make sense as fund manager has flexibility to change the portfolio as per his reading of the market. I am not a fan of Real Estate and Gold so would not comment on their prospects.
In the conclusion please remember, maintaining asset allocation based on your risk profile, financial goals, current net worth etc. and rebalancing the same at periodic intervals requires great discipline. But hey, this surely pays off. That’s a promise.
All the Best.