The Indian stock market continued its uptrend and scaled new all-time highs in October 2021 crossing the 61000 milestone. This calendar year has been by far one of the best years for the Indian stock markets despite the enormous impediments brought in by the pandemic waves. The markets have shown resilience and so have the investors who have not panicked during the volatility.
Small caps followed by mid-cap funds have continued to perform well, with some expected profit booking. The rally in the market has also been well-diversified with some sectors like IT, Pharma and now banks have seen traction indicated healthy performances by corporations in these sectors.
Dynamic asset allocation funds have also seen increased inflows as many investors have preferred the active management of equity allocation in their funds considering the high levels of the stock markets. Debt funds also must be looked at from an asset allocation and financial goal perspective.
The Indian markets have also been the preferred destination of foreign investors which signifies an improvement in market sentiments. Key positive impact creators for the markets have been the vaccination drive by the government and the infections rates in the country under control. Secondly, a lot of efficiency has creeped in organisations of varied sectors and sizes because of digitization, which is showing results in corporate earnings. Thirdly, we also have the factor of equity as an asset class which aims to give inflation-beating returns over a long period of time which is now backed by enough historical data points which investors have taken cognizance of, hence the markets and mutual fund industry is seeing an increasing number of investors joining month on month.
Take Stock and Rebalance
While we remain optimistic about the Indian markets in general, this festive season we advise you to take stock and rebalance your portfolios like you take stock of many other aspects of your life before Diwali. Many of you will have your equity asset allocation increase because of the increase in the value due to the market rally, you may want to look at investing some into debt funds to bring in balance in asset allocation. Long-term investors may look at increasing their equity exposure –Systematic Investment Plan (SIP) still remains to be a good way of investing into the equity mutual funds which average the risk of the market volatility.
Take a review of your financial portfolio across all your investments and map them to your current and future financial goals. Take help and advice of your financial advisor to assist you right in this activity.
On behalf of the entire team of L&T Mutual Fund, we wish you a Happy and Prosperous Diwali.
Keep Safe. Stay Healthy. Happy investing.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.