This twelfth anniversary issue of Mutual Fund Insight finds me much more optimistic and relaxed about the future than many past ones, and I'm sure most of our readers also share this state of mind. Last year, when you received this issue, the 3-year returns of the average large cap equity were -1.3 per cent. This year, they are 17.8 per cent. From our 2013 anniversary issue to the current one, the Sensex and the Nifty are up about 30 per cent, and many funds are up much more than that.
For once, the reasons are not hard to find. Practically for the first time, Indian politics has delivered a government that is focussed clearly on solving problems and growing the economy. Do you remember what the mood in the country was as recently as mid-2013? How pessimistic businesses and investors were? At that point of time, it looked likely that the 2014 general elections would result in yet another hung parliament and yet another coalition that would do nothing for five years as the country went to the dogs. But how quickly things change! Looking back on the fifteen months since that time, I can't help wondering at the miraculous turn that history has taken, right before our eyes.
However, in our narrow domain, where people have to look at a set of options and decide what to invest in and why, it's a little bit different. Here, the more things change, the more they stay the same. In fact, as I've written so many times in the last twelve years, investors are at the greatest risk of taking bad decisions when the markets are booming. When investments are doing badly, savers are naturally scared and cautious. They are more open to paying heed to sensible advice about long-term focus and SIPs and asset allocation and so on.
But that's not the mood now. As stock prices zoom up and NAVs follow, investors seem to be getting even more interested in short-term tactical investments than normal. Looking at one's investments and their returns every day is not a good idea, but it's hard to avoid it when big profits are getting recorded every single day. In these circumstances, even AMCs take the same attitude, of collecting as much AUM as possible while the going is good. Looking at the spate of closed-end funds that are being launched, it's clear where the priorities lie.
However, I believe that the person who reads Mutual Fund Insight is a little bit different from the rut. Over the years, we have gathered around us a community of investors who think differently, who believe in gradually investing in equity assets over many years, and who are willing to wait without following the fashion of the day. While those who are looking for the short-term sureshot will gain and lose as they always do, it's the thinking investor for whom the Acchhe Din are actually coming.
In fact, the most encouraging thing about the smart investors who follow Value Research's magazines and website is that they have arrived upon these beliefs by resisting what the entire hype machine keeps telling them to do. This resolve will serve our community well in the future.
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