Review of the year gone by, 2015

Market participants would have entered 2015 with a lot of anticipation given the strong performance we saw in 2014 and expectations of a block buster budget which would hopefully take Nifty to highs never seen before. While Nifty did cross the 9000 barrier, we ended the year slightly negative with a loss of 4.1% (not adjusted for Dividend).

While large cap remained lackluster, small and mid caps continued to rally. Of the 1405 stocks that were traded on NSE, just 484 under performed Nifty. The best performing stock (among those listed on NSE) was Uniply which shot up from 13.40 to close the year at 159.65. Among the shockers for the year was Bank of India which lost 62% of its value.

Over the past year, NSE continued to introduce new indices though the fact that we do not have any ETF’s that could be traded on them makes them nothing more than a passing trend. Best performing among Sector Indices was the Media Sector while PSU Bank Index performed the worst.

Index Performance for 2015

While we saw strong FII flow in the fist half of this year, towards the last few months, they became consistent sellers depressing prices even as domestic institutions tried to make the best of the opportunity. Mutual Fund inflows have been very strong and has been one of the positive factors to look out for as Indians move away from Gold / Real Estate and invest in the economy via the stock markets.

At Portfolio Yoga, we do not believe that one should invest in the markets at all times. Our Asset Allocator infact reduced exposure to markets at around 8800 levels on Nifty (Feb end) and went back to their opening exposure levels when markets went down to 8000 levels (End August). Markets continue to be not very cheap but cheap enough to justify significant exposure even by those who consider themselves as conservative investors.

Markets in India have fallen in 1992, 2000 and then in 2008. This has made forecasters try to present 2016 as the year of the great fall (there is very little harm in crying Wolf year after year as long as you make it presentable). But my own reading is that any fall to even 7500 levels should provide excellent opportunities for the coming future and unless there is a world wide catastrophe, its very unlikely that we shall see a significant fall from the current levels.

Investing they say is a Marathon and not a Sprint. As any long distance runner will say, the secret to crossing the finishing line is not to expend all the energy at the start nor store so much that one is trailing behind literally everyone else. Stick to a process that is backed by evidence in terms of historical testing while also being a strategy that lets you achieve your goals without causing sleepless nights.

Hope you have a Wonderful Year ahead.