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

Markets have a mind of their own

Understanding stock behavior can be a perplexing endeavor for even seasoned investors. Often, stocks defy expectations, moving in directions opposite to what many anticipate. This phenomenon highlights the . . . .

Never believe Forecasts

Forecasting in financial markets often leads to more confusion than clarity. A simple glance at the probability of Fed funds rate over time reveals the futility of such predictions. In just three months . . . .

Do we need to fear Inheritance Tax ?

Inheritance tax and wealth redistribution have become heated topics of debate in recent times. With elections looming, political rhetoric is at its peak, and various proposals are being thrown into the ring. While it’s essential to understand the context, it’s equally crucial not to . . . .

Don’t fear the market crash !

Exploring the historical trajectory of market crises can offer valuable insights into navigating turbulent times. A chart from a reputable source highlights significant global events spanning nearly a century, from geopolitical conflicts to financial meltdowns. Despite the severity of these crises, the market has . . . .

How does your behaviour impact your investments ?

Stock market volatility can be a rollercoaster ride, as demonstrated by Vedanta’s tumultuous journey over the past 13 years. This case study offers valuable insights into the . . . .

How to pick the right sectors

Market narratives often overshadow objective data, leading investors to overlook sectors with strong performance. By focusing solely on stories rather than data-driven analysis, investors risk missing out on . . . .

Zoom into your selection process

Zoom Video Communications, a household name in online video conferencing, has seen a rollercoaster journey in its stock price over the past four years. Despite being a go-to platform for virtual meetings, the stock’s trajectory has been . . . .

Your money deserves better

In investing, it’s easy to become attached to certain stocks, especially those deemed as stalwarts in the market. However, a closer look at their performance over the past two years reveals . . . .

Markets this week

Throughout the week, there was a notable sense of optimism in the Nifty, particularly during the first half. However, this sentiment took a sharp turn on Friday, as the market experienced a sudden and significant downturn. Within a mere four hours, all the gains amassed throughout the week were wiped out. This drastic shift was primarily attributed to a rumor circulating on several platforms regarding potential changes to the capital gains tax in the forthcoming budget. Speculation suggested that the government might equalize the capital gains rate across all assets. Yet, this narrative was swiftly challenged when the finance minister took to Twitter late in the day, dismissing the rumor as pure speculation. Now, with uncertainty looming, the market finds itself at a crossroads, grappling with whether to treat the rumor as reality or heed the finance minister’s words. Amidst this ambiguity, the Nifty’s stability appears increasingly precarious.

A potential head and shoulders pattern below the 22,400 mark could prompt a correction toward 22,000, though confidence in the finance minister’s dismissal of such speculation may lead to a swift recovery. With an upcoming event less than a month away, market movement might be anticipated, though a significant decline seems unlikely. Despite personal speculation favoring a sharp market uptick, recent trends haven’t confirmed this outlook. Overall, there’s a sense of stability, highlighted by the Nifty’s impressive 25% gain over the past year, with attention now turning to whether stocks can match this growth with solid results.

Benchmark Indices & WeekendInvesting Overview

The Nifty Next 50 index stands out significantly in terms of benchmark performances with a solid 2.6% this week and an impressive 8.5% in the FY25. Remarkably, it now closely rivals mid and small-cap indices for the same fiscal year. Despite being classified as a large-cap index, the Nifty Next 50 is demonstrating behavior akin to a small-cap index, which is quite extraordinary. In contrast, other indices like the Nifty 50, CNX 200, and CNX 500 saw more modest increases of 0.3%, 0.6%, and 0.6% respectively.

Mi NNF 10 gained 4.5% this week, reaching a total increase of 11% in FY25. HNI Capital Compounder and Mi India Top 10 saw gains of 2.2% and 2.3% respectively this week outperforming their respective benchmarks. Mi Evergreen also performed well, with a 1.5% increase this week and an 8.7% increase for FY25. However, some strategies experienced losses, with Mi ATH 2, Mi MT Allcap, and Mi ST ATH losing 1%, 1.4%, and 2% respectively.

Sectoral Overview

The PSE sector has emerged as a dominant force in the markets, experiencing a remarkable surge of 12.6% in just over a month. PSU Banks also posted a strong performance this week, gaining 2%. Following suit, Autos, Energy, and Commodity stocks witnessed positive movements. However, the IT sector continues to struggle, recording a loss of 2.3% this week and a cumulative decline of 5.7% over the last month. Despite a slightly weaker week, Real Estate remains in positive territory, with a 6.9% increase in FY25. Similarly, metals also saw gains, up by 12.3% overall in FY25, with a 0.6% increase for the week.

Across all timeframes, autos, metals, PSU banks, and public sector enterprise stocks have maintained their position as the top-performing sectors. However, real estate is currently experiencing a slight decline, while energy stocks have also seen a dip in performance over the past two weeks. Additionally, gold has notably suffered significant losses recently, while infrastructure is also facing downward pressure. Despite these fluctuations, PSU banks, public sector enterprises, and autos continue to lead the market.

WeekendInvesting Strategy Spotlight

How GOLD would’ve saved Japanese Investors

The stock market can be a powerful tool for wealth creation, but history teaches us that even strong markets can experience long periods of stagnation. Look at Japan’s Nikkei 225 index. After a phenomenal 40 years of 14% average annual growth, it took 34 years for the index to even reach its previous peak again. This is a stark reminder that past performance doesn’t guarantee future results.

This is where gold shines. While the Japanese stock market remained flat, gold prices rose steadily. In fact, since the US dollar went off the gold standard in 1971, gold has outperformed Japanese equities, even considering Japan’s impressive earlier equity growth.

Why Gold?

Stability: Unlike stocks, gold has a long history of holding its value during economic downturns. This stability can act as a hedge against volatile markets, protecting your overall portfolio.

Diversification: Owning gold alongside stocks diversifies your holdings. When stocks fall, gold can potentially offset some of those losses.

Inflation Protection: Gold tends to hold its value against inflation, making it a valuable asset when the purchasing power of cash declines.

That’s why we created Mi Evergreen, a strategy that combines the power of equity along with the stability of gold.

Mi Evergreen selects 20 of the strongest and most liquid stocks from the CNX 200. We then combine these stocks with a gold ETF, creating a 75/25 portfolio (75% stocks, 25% gold). This portfolio is rebalanced monthly to maintain this allocation.

Use code GOLDRUSH to avail a flat 20% discount on your subscription to Mi EverGreen.

Valid till 07 May 2024 (Tuesday)

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.

WeekendInvesting Telegram and YouTube Channel

We post daily content related to investing on our Weekendinvesting Telegram Channel and YouTube channel to help our community take stock of the performance of markets, sectors & our products and touch base upon a new topic every day. We look forward to having you all there! Several videos in this blog are from this series.

Introducing M Profit

That’s it for this week. See you in the next week’s report.