SIP Investing: ETMarkets Mid-Year Survey: Bear Runs Weak Hands From D-St; SIP investors hold fort for now


New Delhi: Recently, many investors, who single-handedly took a plunge in the stock market, probably bore the brunt of their first correction in the market.

Analysts in ETMarkets’ mid-year survey said some of these investors would definitely be shaken up and may refrain from investing more in equities for now, in retail inflows. mutual funds Strengthened through SIP.

However, a handful of analysts believe that they too may see some bearishness, as the impact will be visible only with a lag.

Weak hands have already been shaken, said Yash Shah, head of equity research, Samco Securities, who noted that NSE cash segment volumes are at April 2020 levels.

“This indicates that there has been a significant decline in interest in the market. Moreover, NSE stocks are trading above their 200-day simple moving average (SMA) to 13.7 per cent as against 96 per cent in June 2021. During the COVID outbreak in March, only 10 per cent of the shares were above their 200 SMA in 2020. So right now, the chances of fresh money investing are high,” she said.

Deepak Jasani, Head of Retail Research, said, “Retail investors who have not booked profits so far will be hurt by the continuous fall in valuations.”

securities. If they have borrowed to invest in stocks or become overweight on equities in their portfolio, they would want to stay away from equity markets, he said.

“Other investors who have been skeptical about growth so far will find an opportunity to enter the markets at lower valuations. However the wait for attractive levels can be long and if they do not invest at or near the bottom, they may Can wait for next fall to invest. We will have a new crop of investors who enter the job market or start earning year after year. The numbers and the influx received, cannot be easily replicated,” he said.

Roop Bhoot, CEO, Investment Services at Anand Rathi Shares, said, “This market correction may be the first time for many new investors in the post-Covid era, where many first-time investors entered the market either directly or through the mutual fund route.”

“For direct equity investors, there may be some panic, especially those who are not taking the help of experienced research and advice. However, if you look at the monthly MF flow data there is some panic among indirect investors. As regards stability, there is around Rs 11,000-12,000 crore monthly sip Flow that is viscous. In the long term, we expect to see a gradual increase in SIP inflows,” said Bhoot.

The data showed that SIP inflows rose to Rs 12,286 crore in May, up from Rs 11,863 crore in April, FY23 SIP inflows to Rs 24,149 crore. The SIP inflow in FY 2012 was Rs 1,24,566 crore as against Rs 96,080 crore in FY 2011. SIP account had Rs 5.48 crore

At last count, there were 10.88 crore registered investors on the BSE.

any cross bear marketPankaj Pandey of ICICIDirect said, Weak hands get out.

“But we must understand that the overall participation in equities has doubled in the last two years. Much of this is due to financial awareness. Thus, new age investors will have an awareness of different asset classes, we expect. They’re going to stick around and we believe this will keep retail flows resilient.”

The BSE Sensex was down 10.25 per cent at the time of writing this report; The BSE Midcap index is down 13.8 per cent while the BSE Smallcap index is down 16.72 per cent in 2022 so far. Retail investors generally invest more in midcap and smallcap stocks.

Vineet Bolinjkar, Head of Research, said, “There is a direct correlation of retail investment with market returns. So retail inflows will definitely be hit in the medium term, as many new investors will see a bear market for the first time.”


Consider this process to be cyclic in nature,

Securities said that while new investors are born with each bull market, and with each bear market comes the end of the investment cycle of many novice investor communities.

“After the pandemic, this is the first major correction, though we would not call it a fair bear market. Weak hands are starting to exit the markets and it is not just for direct equities, but the pain will soon be felt in the form of mutual funds. In order to reduce fund inflows into the market which are absorbing the selling shock by FIIs. Retail inflows are directly proportional to the direction of the market, but with a lag effect of a few quarters,” the brokerage said.

There will definitely be a churn, a churn, said Nishit Master, portfolio manager, Axis Securities, who expect weaker hands to exit the market.

“This time it has been delayed as new retail investors have started investing in the markets in the depth of the covid crisis and are still in the money. But we expect some churn there. There is a lot of potential for that. That the retail inflows start declining. In the near future more and more retail investors will start making losses on their original investment amount. It is expected that by that time the FPI outflows should also slow down,” said Master.

Investing is an activity that requires psychological strength rather than intelligence and it is a fact that only a small percentage of investors make money in the long run, said Puneet Patni


“We expect more and more weak hands to exit the market, however, its range will be less severe than in previous bear markets as investor education and awareness has improved in recent days and investors have recognized the importance of buying. Have felt. Dip strategy,” he said.

(Disclaimer: Recommendations, suggestions, views and opinions given by experts are their own. They do not represent the views of The Economic Times)


Source link

Related posts

Leave a Comment