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

Should you buy a house now or later ?

Housing prices have always been a key topic in many countries. Over the years, the cost of homes has increased significantly, often outpacing the growth of . . . .

Defense is the best Offence

Paul Tudor Jones, a highly respected hedge fund manager, became famous in the 1980s for his sharp asset allocation skills. Over the years, he developed a unique approach to managing investments, which is still valuable today. One of his key strategies was to move between different asset classes, such as . . . .

Insurance and Investment don’t go together.

Recently, there has been a detailed look into how Indian households invest their savings. The data shows a clear picture of where most of the money goes and how people are dividing their investments across  . . .

Gold and Emerging Markets

In the 21st century, the performance of equity markets and gold has shown some interesting trends, especially in emerging markets. By comparing the returns in local currencies, we can see how different markets have performed in both these asset classes. While many countries have seen gold outperform equities, India stands out as . . . .

What will do better in the short term Crypto or Gold

In recent years, the market has seen a fascinating comparison between the growth of cryptocurrencies and gold. A specific chart, tracking the ratio of the total crypto market to the price of gold, offers an insightful look at how these two asset classes have performed relative to each other. Over the last eight years, cryptocurrency markets have . . . .

The ideal investor

Market volatility is something that every investor faces. Markets go up and down, and sometimes it can be unsettling. However, it’s important to step back and assess your approach during such times. Like a calm investor who stays composed amidst chaos, staying cool in the face of market turbulence is crucial. If you panic and react to every small drop or rise, you might end up making decisions that harm . . . .

Gold is under owned… massively!

Gold prices have been steadily rising, catching the attention of many. But the big question is: Are investors really paying attention and allocating a significant portion of their portfolios to gold? Or is it just a case of hype, where people are noticing the rising prices but not taking any substantial action? A recent study . . . .

Don’t regret opportunities that were never there!

Recently, the stock of Sri Adhikari Brothers has caught everyone’s attention. Since April 2024, its stock price has skyrocketed from Rs40 to Rs900, with no signs of slowing down. Day after day, the stock hits the upper circuit without any pause. This sudden rise has sparked curiosity among many investors, leading to the question . . . .

Interest rates killing businesses

Interest rates in the U.S. have recently seen a sharp increase, moving from near-zero levels to nearly 7% in a short period. This shift echoes a similar rise between 2004 and 2008, when rates climbed from around 1% to more than 6%, putting enormous pressure on . . . .

Will your fund beat the index over a long period ?

An insightful infographic from U.S. market data gives a clear picture of how equity funds have performed over the past 30 years. This data shows the journey of equity funds between 1992 and 2022, revealing some surprising trends in fund survival and performance. Out of all the equity funds, the results highlight that not many managed to perform better than the S&P 500 index . . . .

WeekendInvesting Specials !

Watch this before you invest in Nifty 50 !

On Sundays, we do special episodes backed by a lot of data, and we try to find insights using that data. So, this weekend, we’ll bring you Nifty 50 insights. 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

What a week this was. It was a bloodbath and mayhem on the streets across the market. Whether it was large cap, mid cap, or small cap, nothing was spared. But then, you know, this was expected at some point in time. Nobody could predict exactly when, but gradually, you begin to understand. As you mature in your market journey, you realize these events will keep coming, and the key is simply to navigate through them. That’s all that is required.

This week, Nifty continued its downward trend from the previous two weeks, making the entire month of October virtually a down month. We’ve just been going down, down, down. Now that we’ve come this far, the probability of further declines may not be as high as it was last month. That’s the silver lining we need to focus on. However, this week was tough, with all five days being down. The last four weekly candles have been completely red, demolishing the gains made in the previous three months. We’re back to where we were at the end of June and are likely heading towards a consolidation zone. At worst, I don’t think we’ll go below that, though that’s just my speculation. In the very short term, the market is oversold, so next week is likely to see a bounce. Another week like this seems unlikely in the immediate future.

Benchmark Indices & WeekendInvesting Overview

Everything is red, and there’s no real point in going through every detail. Still, Nifty 50 was down 2.7%, CNX 500 was down 4%, the small-cap index dropped 7%, and Nifty Next 50 surprisingly fell 6.2%, behaving like small caps on the downside.

WeekendInvesting strategies weren’t spared either, with losses ranging from 3.5% to 9.2%. Big cuts are happening, especially in momentum strategies. When markets fall, these strategies tend to drop fast, but there comes a stage when some strategies shift into cash or more defensive, lower-beta stocks. As the market continues to fall, certain strategies may begin to outperform, which is the usual case.

Sectoral Overview

As for sector performance, IT stocks bucked the trend, falling only 0.2% this week but up 20.5% for FY25, making it a standout performer. Public sector enterprises collapsed by 7.5%, metals dropped 7.2%, real estate was down 7%, and PSU banks lost 5.8%, with a year-to-date performance of -10.3% for FY25. Commodities, autos, energy, and infrastructure all fell 5% to 5.7% this week. Energy, in particular, wiped out all its gains for the financial year. FMCG, supposedly a defensive sector, had a tough week, falling 3.5%, though it remains up 9% for FY25. Pharma did well overall, up 18.8% for FY25, despite a 3.4% decline this week. Private banking was relatively flat, but down 3.2% this week, while IT stocks were the best performers going forward.

In terms of sectoral momentum, IT stocks have risen to the top, with gold, pharma, and financial services also showing strength. However, consumption, metals, and autos have collapsed. PSU banks are trying to make a comeback but are still down on an absolute basis. Energy stocks, real estate, and public sector stocks are also down. The focus remains on IT, pharma, and banking, where the least damage is being done.

WeekendInvesting Strategy Spotlight

The ebbs & flows of investing journey !

The spotlight is on the ebbs & flows of markets. It’s like taking two steps forward, one step back, and sometimes three steps back. The key is not to give up on the path you’re on. Taking the example of Mi MT Allcap, which has been live for five and a half years, you can see how it trailed CNX500 for the first year and a half, then outperformed during the COVID collapse because it shifted to cash and avoided deeper losses. As the market recovered, the strategy continued to outperform. But there were phases of underperformance, too.

For instance, Rs. 100 invested in CNX 500 became Rs. 245, while the same amount in Mi MT Allcap grew to Rs. 525. However, when looking at quarter-on-quarter or month-on-month performance, there were periods of underperformance. Many people make decisions based on short-term performance, but this recency bias can harm long-term returns. It’s important to trust the vehicle or strategy you’re using, whether it’s your own, a fund manager’s, or a mutual fund, and believe that if it has performed well over a longer period, it will likely continue to do so unless there’s a significant change in philosophy, strategy, or leadership.

When markets fall, old sectors are left behind, and new sectors with future potential are onboarded. In conventional investing, you might remain stuck in sectors like defense or public enterprises, where you’ve made significant returns, but those sectors may not perform over the next two to three years. You could end up losing opportunities elsewhere while waiting for those sectors to recover. This is where dynamic allocation becomes crucial. Not every trade will be an outperformer, but over time, if you can beat the market, that’s a win.

Ups and downs, ebbs and flows are an inevitable part of investing. You need to embrace them. While uptrends are enjoyable, they come with a complementary downtrend. Embrace downtrends as opportunities to invest more and wait for new stocks and sectors to emerge.

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