Marathi Sanket

A Note to SIP Investors (Not for Lumpsum & Market Timers) Many of you have started your SIP journey in the last five years. Data shows that nearly 3 in 4 existing SIPs were initiated during this period. Many who began investing in the aftermath of the pandemic have enjoyed extraordinary and, in some cases, unbelievable returns. While the long-term historical return for Indian stocks has ranged between 10% and 13%, some investors—particularly those focused on Small & Midcap segments—have registered over 20% CAGR. Congratulations! Equity markets have corrected by about 10% to 15%, depending on the index you consider. Similarly, the funds you invest in may have performed slightly better or worse within this range. At this juncture, it is important to remember three critical lessons: 1. The First Rule of SIP Investment: NEVER Stop If you start a SIP (Systematic Investment Plan) and never stop, you don’t have to do anything else. You don’t need to follow expert opinions or read reports (including #DSPNetra). By averaging your investments over the long term, you automatically accept average valuations, average returns, and average volatility. Ironically, most investors don’t even achieve average returns due to emotional decision-making. SIP provides a structured approach that removes the need for timing the market. Stopping your SIP disrupts this compounding effect and negates its mathematical advantage. 2. Past Returns Are Irrelevant to Future Performance The returns you have made (or missed) are in the past—they may or may not be replicated in the next five years. Through #DSPNetra, we have repeatedly emphasized that holding overvalued equity investments is similar to owning bonds with stock-like volatility. Small & Midcap segments have been expensive in recent quarters and are only now beginning a mean reversion, with some way to go. There have been extended periods when Smallcaps, Midcaps, or even Largecaps have delivered little to no returns. These rough patches often lead investors to stop their SIPs. Consider an investor who started Dollar Cost Averaging or SIP in Japan in 1989—could they continue investing for nearly two decades with minimal returns? Probably not. But those who did emerged better off than market timers and those who quit. (See Image 1 for instances where broader markets remained flat, yet SIPs delivered results.) 3. Investing Has Been Gamified—Resist the Urge to Swipe Start or Stop In recent years, investing has been gamified—it’s now extremely easy to swipe and invest in seconds. Unfortunately, this convenience has also increased impulsive activity. Many investors, driven by adrenaline, news, opinions, and rapid market movements, end up making frequent transactions, which only increase costs and reduce returns. Do not mistake the ease of investing for the ability to time the market. 4. If You Started a SIP Recently, Timing Is Irrelevant in the Long Run For those who started a SIP in the last year or are considering starting now, remember: if you stay invested long enough—i.e., over decades—timing becomes irrelevant. Take the case of Smallcaps. History shows that even starting a SIP at market peaks, provided you focus on quality investments, allows you to stay invested longer. Why? Because initial low or negative returns help reset expectations, making it easier to remain committed. Lower expectations = higher probability of staying invested. (See Image 2 for data on SmallCap indices at recent peaks.) 5. A Bear Market in NAVs Is a Bull Market in Units If you are leveraged, overexposed to equities, or if SIP forms an insignificant part of your portfolio, these pointers may not be helpful. However, for disciplined investors, even bad initial outcomes should not deter you. When equity prices fall and NAVs decline, you accumulate more units for the same SIP amount. Bear markets in prices are bull markets in units. They allow you to accumulate more investments, potentially leading to better long-term returns—provided your underlying investments are sound.

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*🚀 Budget 2025* *Summary* The government’s focus in the budget is on development 📈... Global growth slightly affected due to global tensions 🌍⚡️... The budget emphasizes 10 key themes 🏗... More focus on the development of the poor 🏡, women 👩‍💼, and youth 👨‍🎓... Increased emphasis on rural development 🚜 and manufacturing 🏭... More reforms to be introduced in the financial sector 💰... *🔹 Key Announcements:* ✅ Dhan Dhanya Yojana 🌾 to be launched in 100 districts... ✅ Special 6-year mission for Tur, Urad, and Masoor dal 🌱... ✅ Makhana Board 🍘 to be set up in Bihar... ✅ Central agencies 🏢 to purchase pulses for 4 years... ✅ New schemes 🌱 for vegetable and fruit 🍏 production in collaboration with states... ✅ Development of the marine sector 🐟... ✅ Kisan Credit Card 💳 limit increased to ₹5 lakh... ✅ Urea plant 🏭 to be set up in Assam... ✅ India Post 📦 to be developed as a major logistics organization 🚚... ✅ Special credit card 💳 for small businesses... ✅ Self-reliance in edible oils 🛢... ✅ Special schemes for footwear 👞 and leather 👜... ✅ India 🇮🇳 to become a global hub for toys 🧸... ✅ Special scheme for women from backward classes 👩‍👩‍👧‍👦... ✅ 22 lakh new jobs 🏢👷 to be created under the Leather Scheme... ✅ Launch of the National Manufacturing Mission 🏗... ✅ Increased emphasis on Indian languages 📖 in education... ✅ More IIT institutes 🎓 to be established... ✅ 75,000 new seats 🏥 in the medical field in the next 5 years... ✅ Special AI 🤖 research centers to be set up... ✅ Health insurance 🏥💊 scheme for small workers... ✅ UPI-linked card 💳 for small vendors... ✅ UPI-linked credit card limit set at ₹30,000 💰... ✅ Interest-free funds 🏗💵 for states to boost infrastructure development... ✅ ₹1 lakh crore fund 💰 announced for urban development 🏙... ✅ Increased focus on nuclear energy ⚛️ by 2047... ✅ Special scheme for nuclear energy ⚛️... ✅ Special scheme for the ship-breaking industry 🚢⚙️... ✅ More cities 🏙 to be connected under the ‘Udaan’ 🛫 scheme... ✅ New airport ✈️ to be constructed in Bihar... ✅ 40,000 housing units 🏡 to be built under the SWAMIH scheme... ✅ 52 new tourist destinations 🏝 to be developed in collaboration with states... ✅ New mining policy ⛏️ to be introduced... ✅ ₹20,000 crore investment 💰 in R&D 🔬 for the private sector... ✅ All government secondary schools 🏫 to be connected with broadband 🌐... ✅ New schemes to boost exports 📦... ✅ Buddha-related sites 🏯 to be developed... ✅ Special scheme for preserving Indian scripts 📜... ✅ Easier access to funds 💵 for export promotion... ✅ New Income Tax Bill 📜 to be introduced next week... ✅ 100% FDI limit 🌍 in the insurance sector 🏦... ✅ Simplification of RE-KYC process 📑... ✅ 100% FPI limit 📊 in the insurance sector... ✅ Custom duty removed 🚫💊 on 36 life-saving medicines... ✅ Changes in custom duty on electronic goods 📱... ✅ No primary duty on lead & zinc ⚒️... ✅ Duty removed 🚫 on crust leather 👜... ✅ New, simplified Income Tax law 🏦📜 to be introduced... ✅ TDS rates to be made simpler 📉... ✅ Major tax relief for senior citizens 👴👵... ✅ Tax exemption limit for senior citizens increased to ₹1 lakh 💰... ✅ TDS exemption limit on rent 🏠 increased to ₹6 lakh... ✅ No penalty 🚫 on delayed TCS payments... *🎉 Biggest Announcement:* No tax on income up to ₹12 lakh! 💰🎊

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*Current Equity Market Correction: Key Reasons* 1. *Tight Liquidity*: Liquidity conditions are significantly negative, around ₹2.5–3 lakh crore. 2. *Rupee Depreciation*: The rupee continues to weaken and is expected to stabilize around 92, according to experts. 3. *US Interest Rates*: Elevated US interest rates and an inverted yield curve are adding pressure. 4. *Weak Corporate Earnings*: Disappointing earnings in Q2FY25 have impacted market sentiment. 5. *Government Capex Allocation*: A significant portion of capex is directed toward non-multiplier segments, reducing its overall productivity. RBI’ yesterday addressed Liquidity and Currency Concerns 1. *Open Market Operations (OMO)*: ₹60,000 crore G-Sec purchase to inject liquidity. 2. *56-Day VRR Auction*: ₹56,000 crore through a Variable Rate Repo to address short-term liquidity needs. 3. *USD/INR Swap*: A $5 billion buy/sell swap for six months to stabilize the rupee and manage forex reserves. These measures are equivalent to a “rate cut” in terms of their impact and signal the RBI’s proactive stance. Other Factors 1. *US Interest Rate Outlook*: Rate cuts are expected by Q3 CY2025 as prolonged high rates could strain the US economy. 2. *Corporate Earnings*: Earnings recovery is anticipated from Q2 FY26 as macro conditions improve. 3. *Capex Allocation:* The upcoming budget may emphasize productive, growth-oriented investments. *Investment Strategy Amidst correction and Volatility* *#The next six months could remain volatile due to these factors. This presents an opportunity to:#* *# Invest systematically in equity-oriented products that have the potential to generate alpha.#*