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

 

1) Global Equity – PE vs ROE:

 

1) India’s valuation has cooled after recent time correction and is now reasonable.

 

2) US is not cheap now after the recent rally. US ROE (Return on Equity) is the highest globally for now.

 

3) Europe, China, Vietnam and Emerging Markets are all looking good for investment.

 

 

2) Is Market Timing Important?

 

Market Timing is important even if the time horizon is 10 years.

 

As per data of US markets, since 1926, for 10 years rolling return, the range of return can vary from -5% to 22% depending upon when you invest.

 

Don’t close your eyes and invest. Watch out for market valuation. Invest more when markets are down and slow down when markets are expensive. 

 

3) MSCI India P/B vs. 10-year Returns:

 

Current P/B of 3.5 implies a 10-year expected annual return of 11.1% per annum.

 

This is not looking so attractive when compared to 7.5% being offered in fixed Income.

 

Why take an unwanted risk for 3.5% more?

 

This question is making investors wary of equity. 

 

4) Private vs Public Investments – Which is better?

 

Do Private or Alternate Investments like PE, VC, Hedge Funds etc. make sense in the portfolio?

 

As per evidence, private investment strategies tend to underperform public strategies, especially after high fees are taken into account.

 

There is no evidence that the investor needs alternatives to build wealth. Warren Buffet dont have alternatives in his portfolio.

 

Though, investing in alternatives can be nice to brag about at dinner parties.

 

5) What are you worried about?

 

Negative views about world and the future have surged to unprecedented heights.

 

Seems like humans are becoming more negative by nature due to technology, social media and mobile phones. 

 

Otherwise, the world is better than what it was 1 year, 2 years, 3 years or 10 years back. 

 

 

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

 

 

Best Regards

 

 

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

 

 

Alpha Research