The WeekendInvesting Newsletter

Another brand new initiative from our Research Desk is The WeekendInvesting Newsletter. This is a daily newsletter that summarizes all the stories we cover during the day(market nuggets), including the daily byte that we shoot every evening. This newsletter will be delivered to your email every evening on market days, providing you with a wealth of market-related information. The newsletter includes both summaries and long-form blogs for all the market nuggets covered. These blogs are also linked to the videos we shoot, so you can choose to watch or read the content according to your preference.

Check out our past newsletters.

From the Research Desk of WeekendInvesting

Deficits and inflation are here to stay

The U.S. budget deficit has been on a concerning rise over the past several years. After the 2008 financial crisis, the government increased its spending to stabilize the economy, leading to a significant deficit. Although there was a brief recovery, the deficit started to rise again from 2014. The COVID-19 pandemic in 2020 caused the deficit to . . . .

Realistic Expectations

For over a century, the 60/40 portfolio—60% equity and 40% bonds—has been a popular strategy in the U.S. financial markets. This strategy has seen its ups and downs. If you look at the data from the past 12 decades and adjust it for inflation, you’ll notice that there were several periods where . . .

Be ready for Volatility

Over the last few years, the U.S. prime rate, adjusted for inflation, has experienced a sharp rise. Small businesses that once paid a funding rate of around 1% to 2% for nearly a decade are now facing rates close to 7%. This sudden increase in interest rates is causing major challenges for small businesses, making it hard for . . .

Fund size matters

When comparing the performance of large hedge funds to market indexes like the S&P 500, interesting trends emerge. One example is the Bridgewater hedge fund, managed by Ray Dalio. Over the last decade, Bridgewater’s annual growth rate was just 4.3%, compared to the S&P 500’s 18.4%. This shows a significant gap in returns. While this might seem like an unusual case, it actually reflects a . . . .

India has solid Forex reserves

India has recently made headlines by reaching $700 billion in foreign exchange (forex) reserves, placing the country fourth in the world, behind China, Japan, and Switzerland. This is a major achievement, as having such high reserves acts as a . . . .

Why Gold allocation matters

The S&P 500 is a key index that shows the performance of large U.S. companies. From 1997 to 2016, the S&P 500 had quite a bumpy ride. It started at 750 points and went up to 1,500 before the dot-com bubble burst. This was a huge drop, cutting the index down by . . . .

India gets back its Gold

The Reserve Bank of India (RBI) has shared some significant news. By the end of 2024, the RBI held a total of 854.73 metric tons of gold. Out of this, 510 metric tons are now stored within India itself. Earlier, a large part of the gold reserves, around 324 tons, was kept safely with . . . .

Ask your financial advisor this imp Q

Gold prices in India have seen a remarkable rise over the past few years. Back in April 2018, the price of gold stood around ₹28,000 per 10 grams. Fast forward to today, and the price is hovering near ₹78,500. That’s almost three times the value in just six and a half years. For an asset class often considered to provide no returns, this growth has been extraordinary. This price surge shows that . . . .

WeekendInvesting Specials !

This stock Delivered FANTASTIC Profits. Should you BUY Immediately ?

On Sundays, we do special episodes backed by a lot of data, and we try to find insights using that data. This and more will be available on the Weekend Investing app, which you can get on Google Play and the App Store.

Markets this week

The markets have been on a downswing, as you all know. However, things seem to be slowing down now. The pace of the fall has certainly been arrested, though it may be just a pause before another fall—such possibilities always exist. As we edge closer to the U.S. elections, the market seems to be waiting for the outcome. Either way, I don’t believe India will be impacted badly. India is an important trade partner for the U.S., so any president, whether Trump or otherwise, is unlikely to have issues with India. However, if Trump wins, a pro-America manufacturing agenda might emerge, which could weaken China’s currency and impact India. But we’ll cross that bridge when we get there.

The last two weeks trended downward. This week, we saw a flattish consolidation, which may indicate either a pause before another fall or the start of a build-up. The level of 24,500 will be the first cue—if that level is crossed, we might see a leg up. Conversely, a drop below 24,100 could signal further weakness. After four weeks of a downtrend, we finally got a week of consolidation. Though no uptrend is in sight yet, the formation of a doji candle suggests a potential end to the downtrend. However, it’s important to note that this isn’t guaranteed.

Benchmark Indices & WeekendInvesting Overview

Looking at the benchmarks, small caps stood out this week, performing well with a gain of 2.3%. In contrast, large-cap indices and multicap indices like CNX500 fell by 0.4%, while Nifty Next 50 collapsed by 1.3%.

Among Weekend Investing strategies, Mi ATH 2 was the top performer, up 3.8%, followed by HNI Wealth Builder at 2.6%, Mi 25 at 2.3%, and Mi 35 at 2%, all benefiting from a small-cap strategy. Meanwhile, strategies focused on larger caps, such as Mi EverGreen, Mi India Top 10, and HNI Capital Compounder lost ground this week.

Sectoral Overview

In terms of sector performance, three sectors stood out. Autos and IT were on the downside, while PSU banks were on the upside. Other sectors fluctuated within a range of plus or minus 1.5%. The auto sector faced challenges due to rising inventory, though reports suggest October has been reasonably good, which could slow down the inventory buildup. IT stocks fell due to Microsoft’s caution regarding the next year, despite good results. Meanwhile, PSU banks delivered solid results, finding some support to halt their decline.

In sectoral momentum rankings, gold took the top spot, followed by pharma, financial services, banks, and IT. IT stocks have stumbled in the short term but remain strong on a longer average. PSU banks also rose in the short-term rankings, with the financial services and banking sectors generally holding up. However, pharma, which previously ranked high, has slipped to seventh place in recent weeks. This shift signals that money is moving toward safer assets like gold, reflecting growing market concerns. Eventually, though, this trend will reverse, restoring the balance.

WeekendInvesting Strategy Spotlight

The Agony of Waiting . . .

In the Weekend Investing strategy spotlight, we reflect on the agony of waiting through market lows. For instance, PFC (Power Finance Corporation) went nowhere for 13 years after its listing. Each time it dropped to around Rs. 50, people would buy, and at Rs. 100, they would sell.

But then, in one instance, PFC shot up from Rs. 100 to Rs. 500. Many investors, stuck in the yo-yo of buying and selling, likely didn’t last until the breakout. After years of seeing the same stock revert to a certain level, most investors lose patience and exit, only to miss out when it finally surges. This is normal, but if you follow a non-discretionary strategy, you won’t get bogged down by these emotional cycles.

Momentum investing, for example, might result in more small losses than wins, but the few big wins more than make up for the losses. Out of 100 transactions, about 50 to 60 might go right, and the other 40 to 50 might go wrong. But the gains from the winners are generally much larger than the losses from the losers. A common mistake is avoiding a stock after experiencing a loss with it. However, a stock might give you small losses several times before it becomes a multi-bagger. So, it’s important to remain unbiased and treat each trade as a fresh opportunity.

Take the example of Mi Evergreen, a conservative strategy that invests in 20 top 200 stocks and allocates 25% to gold, rebalancing monthly. Since going live in January 2021, it has steadily built alpha over its base. The strategy continues to grow the portfolio over time by reinvesting the winnings. This consistent, methodical approach allows the portfolio to grow without constant worry. Having a clear plan and strategy is essential to compounding your gains over the long term.

Rebalance Update

We give advance notice here on the upcoming changes in your smallcase for Monday. This advance notice can be used to ignore Monday’s update if there is no change. If there is a change indicated you can use the smallcase app or log in to weekendinvesting.smallcase.com to see the rebalance. A backup email is sent by mid-day Monday if you have not rebalanced by then and yet another one a

Note: We are not including LIQUIDBEES as an ADD or an EXIT count.

WeekendInvesting Strategies Performance

WeekendInvesting Products – LIVE Index Data

Many of you had asked us to make the index series of all WeekendInvesting Products available so that you could perform your own analysis and studies. You can find a link to the LIVE sheet here and also on the HUB under the support column in the content tab.

Disclaimers & Disclosures