Please find below the 5 charts that tell interesting stories on Markets and Investing.

 

1) Indian Equity – Valuation Analysis:

 

a) Indian Large Caps are overvalued by ~10%.

 

b) Small Caps have attractive valuations despite a good rally in the last 2 years due to good earnings growth.

 

c) Mid Cap relatively looks expensive.

 

Investors can expect to make good return from the current level.

 

 

2) The Indian Yield Curve has Flattened:

 

In the last 6 months, interest rates have gone up meaningfully across the yield curve due to rate hikes. 

 

The future rate hikes have mostly been priced in the current rates.

 

Debt Funds/ Bonds with 3-5 years looks as a sweet spot in the current hiking cycle.

 

 

3) Becoming Bullish on the US Equity:

 

History provides no guarantee for the future, but we get some comfort in knowing that buying stocks when they’re down tends to offer positive outcomes.

 

When US S&P 500 is down 25% or more, then most of the time, 1 year average return is 21%.

 

 

4) What is in Your Control?

 

In markets, it all comes down to the single most important thing that is within your control: Your Own Behavior.

 

If you can master that, it is almost impossible not to succeed as a long-term investor.

For everything else, don’t fret much. Give them time.

 

 

5) Investor Return vs Fund Return – The Cost of Behaviour Gap:

 

Based on the evidence, investor returns trail the fund returns across all categories.

 

The 1.73% annualized “behaviour gap” over the last 10 years is a result of investors buying high and selling low, again and again.

 

– US Data, Barry Ritholtz

 

 

Read more similar articles in our blog – https://alphacapital.in/blog/

 

Best Regards

 

Dr. Mukesh Jindal CFA, CFP, CAIA, Ph.D.

 

Alpha Research