Dear Investor,
The war in Iran has caused anxiety to peak and markets to open lower. Unless the war drags on and Oil goes above $120/barrel, we don’t see a significant risk to India’s Balance of Payments. The share of Oil in the import basket has gone down over the years and is now 20-25%. Certain sectors like aviation, ports will take a hit - but these are structural growth sectors. The base case is that the war is contained and gets over in 6 weeks. Please filter out the noise and don’t engage in panic selling.
The downturn may present good opportunities for staggered deployment of excess cash. Nobody can predict the bottom, therefore a staggered deployment is a prudent option.
The debt/cash component in our equity portfolios will allow fund managers to purchase securities at a discounted price. As of 31st Jan, the debt/cash positions in the Equity Only Model portfolios, indicating our defensive stance, were as follows:
Equity Portfolio | Benchmark | Non-Equity Defensives (Debt/Cash/REITs) |
|---|---|---|
High Risk
(SIP Only) | Nifty 500 TRI | 6% |
Medium Risk | Nifty 500 TRI | 11% |
Low Risk | Nifty 50 TRI | 12% |
Of course, if you are using our advisory services, you’d have a higher debt + gold component allocated towards your goals. If you have set up your goals correctly, you can go and check HA3’s recommended asset allocation by asking Otto : “What is my recommended asset allocation?”.
Remember that markets don’t move linearly (unlike fixed deposits) and this volatility is the price we pay for higher returns in the equity market.
Happy Investing!