Letters to the Editor's Note

Dhirendra Kumar's Editor's Note titled '2025 predictions unveiled: The big lie everyone believes', published on December 28, 2024, underscored the importance of sound investing over market predictions, sparking an enthusiastic response from the audience.

As a gesture of gratitude, we dedicate this section to our readers, whose insightful responses inspire us to continue having meaningful conversations around investing.

Summary

As the calendar flips to 2025, business channels are abuzz with chatter about the Sensex's journey, small-cap trends and what lies ahead. Experts confidently explain how they 'always knew' the market's trajectory, conveniently forgetting their earlier flip-flops. At the start of 2024, investors were urged to worry about global recessions, oil prices and more. Yet, the Sensex ended the year up by 9 per cent - a respectable performance despite the noise. Those who stayed invested through the ups and downs have done well.

Market predictions are notoriously inaccurate and largely irrelevant for serious long-term investors. Major wealth-creation opportunities - like the rise of IT services, private banks or the transformation of old-economy companies - were rarely forecasted. The truth is, the best strategy for 2025 is timeless: align your investments with your financial goals and time horizons. Money needed within a few years belongs in fixed-income options, regardless of stock market trends. A diversified equity mutual fund portfolio, invested via SIPs, remains ideal for goals over five years away. SIPs help average costs through market highs and lows, delivering consistent results over time.

The real danger of year-end predictions lies in the illusion of expertise they create, tempting investors to make unnecessary portfolio changes. Each tweak brings costs - monetary, cognitive and opportunity-related.

As we step into 2025, it's time to revisit your financial goals instead of obsessing over sector predictions. Are you saving enough? Are your investments aligned with your timelines? Do you have adequate insurance and emergency funds? Is your SIP amount keeping pace with income growth?

Here's the irony: even this advice to focus on fundamentals could be seen as just another 'prediction'. But unlike market forecasts, it doesn't rely on guessing what lies ahead.

The calendar changes, but investing principles remain constant. Stay invested, stay diversified and keep your costs low. Everything else is noise - no matter how loudly the 'experts' proclaim it.

What our readers say

I have been fond of reading your financial articles and watching your talk show for the last 20 years. You're amazing. In the loud voices of financial experts who show themselves as the god of everything, your calm and cool approach has always benefitted me. I recommend you to all my friends.

I am lucky to have you as my financial guide. With the help of your articles and shows, I can manage my life financially better than my colleagues. - Rajeev Singhal

That's the perfect thing you have written regarding experts. I listen to the experts only if they have something to enlighten me about a particular company they have analysed. Otherwise, they usually say what is very obvious or try to be Nostradamus, which is always wrong. So, your advice to stick to one's own goals is much better. - Shailesh Patel

I am one among the large universe of your fans and admirers. Your recent note for 2025 is one of the best pieces of advice I have come across in my investment journey of about 20 years (I am old enough!). Thanks for your effort in cautiously navigating common investors through an ocean full of sharks. - H B Trivedi

Thanks for your well-timed suggestions and belief in the equity market. The so-called experts shall suggest anything and everything, and when their predictions go astray, they immediately take a U-turn. Really, nobody knows what the market shall be doing tomorrow. Hence, the mutual fund investments, which I am dependent upon, shall continue according to my priorities.

I want to try only the new investment category of Rs 10 lakh once it is available in the market. - S Chakraborty

I am a regular subscriber and reader of your articles on Value Research Online. Loved your latest one on year-end predictions. I don't believe in them or am indifferent to what they say. Since I am a 'buy-and-hold' stocks guy, I believe in what micro factors are influencing my specific stocks, which I have been holding for a considerable period (more than five years).

I don't bother much with the rest, and skip reading macro trends because they are of little use other than improving general knowledge. I review my portfolio based on my goals once a year (in December) and hardly make any changes. I keep investing in the same stocks throughout the year. This approach has stood me in good stead, with a 17.7 per cent CAGR over the last 10 years - not spectacular, but decent.

I have learned most of these inputs from your articles. Thank you very much. Keep sharing your insights. - Sridhar V

Mature, fatherly, and wise - that's how I describe it.

Every word rings with the honesty of purpose. It is seldom that people express such views so frankly and honestly. As a reader of Mutual Fund Insight from its first issue and a follower of Dhirendra Kumar's opinions and advice for several years, I offer my New Year greetings to all team members at Value Research.

God bless you all. - R Radhakrishnan

All the weekend articles have been written very nicely, and I follow them regularly. Today's article rightly focuses on financial goals and staying invested. Yes, I fully agree that noise should be avoided, and one should not be bothered about predictions, which may be right or wrong. It is their job to create noise and predictions, but let us focus on our goals and activities. A very valuable piece of information at the end of 2024. 2025 is a fresh beginning, and let us hope for good tidings. - Venkatachalam K K

This article was originally published on January 15, 2025.