In our last discourse about your aggressive growth investing in September 2021, we asked you to prune down your allocations to mid- and small-caps. It was not because we had magically attained a foresight into an impending crash (though in hindsight it has turned out to be so), but the idea was to restore your asset allocation as the post-COVID rally might have substantially bloated your exposure to this segment. Cut to today, the market scenario is completely opposite. The past six months have not been good for equity investors as after a two-year uptrend, the tide has turned for stocks. While the broader market has slipped by about 10 per cent in 2022, mid- and small-caps have been the worst-hit. As of June 2022, the BSE 150 Midcap has declined 15 per cent and the BSE 250 Smallcap has crashed 20 per cent from their peak in January. But at the stocks level, this segment is bleeding much more with some of these names having lost up to 65 per cent of their value in the past six months. For smart investors like the ones reading this update, this is precisely the time when you should not halt your investment plans. Here is why. Keep calm and carry on Going again with our timeless investing mantra, the quivers in the stock market need not make you jump out of the chair. This might sound incongruous to many people. After all, the average person has enough reasons to stop investing at this stage. Economic growth is slowing down, inflation is on the boil and interest rates are rising, besides the sharp decline in global markets and the resurgence of COVID cases. So, why are we asking you to continue investing in the mid and small caps at this juncture? Investments made during bear phases yield the highest returns. Not participating during such downturns is like a shopaholic refusing to buy when there is a big discount sale. Even if you theoretically time the market perfectly i.e., stop investing when it starts sliding down and re-enter when the trend is reversed, chances are you will end up with a lower corpus as against someone who would have just kept calm and continued investing (see chart 'Quitting is futile'). So, taking stress and unnecessarily tweaking your investment plan is highly counterproductive. Do not overlook the risks Admittedly, investing in mid- and small-cap stocks is riskier than putting money in large-cap compa
Buy, hold, or switch. Get the call.
How's my portfolio doing? What do I need to fix? Where should I invest next? Fund Advisor answers each one. The Advisor Note every Saturday. A live session with Dhirendra Kumar every second Saturday.
No commissions. No conflicts. Since 1991.
See Plans
Already a subscriber ?Log In
New episodes every Friday 
New Process Alert 
Seems like you've uploaded a wrong QR code. Please upload the QR code downloaded from MF Central platform.
