A review of the year gone by

On being asked, I suggested to a well known Editor of a business television channel that just like the Cricket telecasts shared statistics of the last five innings or games of a batsman when he walked to the crease to bat, his channel too could provide the accuracy percentage of the last five market or stock calls made by the ‘expert’ guest whenever they featured on a show. For obvious reasons, the idea did not find favour.  I, for one though, am quite willing to have my calls during the entire year scrutinized, and hence, over this part and the next, I shall share excerpts from this column in 2020.     

On January 6, 2020, I said here that “on the equities front, the indices in 2019 were largely fuelled by less than a dozen high weightage index stocks, while most stocks, particularly those from mid- and small-cap categories, took a hammering. The consensus seems to be that the rebound will come from these segments, but I believe they will still take some more time to recover.

However, this would still be a good year for serious equity investors to accumulate quality stocks and bide their time as part of their longer term investment cycle.” On March 16, 2020, I said here: “So, where will the Indian equity market head from here? I won’t duck that question and will stick my neck out even at the risk of ending up with egg all over my face. After all, the forecast hinges on the duration of the malevolent effect of the coronavirus.

If I had an investment time frame of at least 30-36 months or more, I would bite the bullet and stay invested in equities and if my budget permitted it, start or top-up SIPs or STPs in mid- and small-cap funds that can deliver sharp returns when the market reverses and trends upwards again.” And on May 11, I said, “In the last week of March 2020, when the equity market indices were falling like ninepins, my team convinced me to shoot a brief five-minute video that was shared exclusively with our investors.

The primary objectives were to sooth frayed nerves and provide reasons to not just stay the course with quality existing investments but also buying aggressively via SIP or STP into the funds curated by our team based on the life-cycle stage of investors. “Most of our investors took the cue. Coincidentally perhaps, from the very next day, the BSE Sensex and NSE Nifty commenced its bounce back and April turned out to be the best month for equity indices since 2009.

But did it also mean that it was time to sell and await the next correction to reinvest? Perhaps so, if one is a trader or has achieved a near-term goal. For the rest, our message remained: Stay Invested, Stay Patient. There is adequate anecdotal evidence to suggest that patience is the key to wealth creation.”

(Ashok Kumar heads LKW India and can be reached at ceolotus@hotmail.com )