"EQ PMS has declined by 3.2% in January against Nifty gain of 4.72%. However, our 5 year CAGR is 45% Vs Nifty 12.25% as on 31 December 2017. Such short periods of under performance have been experienced by us several times in the past. 2017 witnessed massive wealth creation by investors, which is evident from our own performance 79.29% against Nifty gain of 28.6%," reads the note.
SGX Nifty 10,330 - more panic after US sell-off!— Porinju Veliyath (@porinju) February 6, 2018
Just sent this message to our PMS investors: pic.twitter.com/nZJbVg7gU7
While seeing the half-glass full, he views the market plunge in past few days through the lens of optimism. He further says in the note, "Corrections like the one just witnessed keeps markets healthy as they keep a check on complacency , leverage and excesses. We feel comfortable, though some of the recently joined investors might not take it lightly -- our seasoned investors would rater add more funds and take advantage. Markets have bounced back every time after such dips -- be it Greece Default. Brexit. Trump win, Fed rate hike or Gujarat elections. We are comfortable with the stocks held in your portfolio, mostly emerging/ turnaround businesses acquired at reasonable valuations."
He suggests investors not to fret over imposition of 10% long term capital gains (LTCG) tax on equity when he says, "The Union Budget is over and it was on expected lines; anyway most of the economic reforms and decisions are made outside the budget. The 10% tax on LTCG is fine -- it was expected and will not disrupt the equity culture, emerging in the country. In fact, India is hugely under-invested in equities; household savings have only started to flow."
While lauding the structural reforms carried out by the Centre, Veliyath says, "After the recent temporary slowdown due to implementation of structural reforms, i expect faster economic progress in the coming quarters with good visibility on corporate earnings, especially companies which are on a turnaround path. There is unprecedented improvement in 'Corporate Governance' among the listed companies, thanks to demonetisation. GST and India's serious efforts to reduce corruption and black money."
He concludes by adding, "Let is focus on stock picking in world's fastest growing economy, which is attempting to enter into a new growth orbit. I find impressive value investing opportunities to compound of your wealth in the coming years."
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