And please don’t think about investing in individual stocks just because Nifty PE is low.
May I request you to see if any such water holds true for that index too!
But the above numbers are just ‘averages’. Choose your reason below and click on the Report button.
But before we get to the findings, let me say this upfront that this is not a sure-shot method to make money. But it requires you to witness -30%, +20%, 5%, -15%, 13%, etc. But, the recent corrections has made valuation reasonable not just for Nifty but for most of the blue-chip names. Dev Ashish is a SEBI-registered Investment Advisor (RIA Reg. I help people align their investments with their real financial goals. Obviously, I had several thousand data points for each of these periods. A better picture can be painted if in addition to the average returns, we also consider the following: I want to spend some time here to highlight what all this means. To counter this, we need to analyze a few more things. Like previous years, I have once again revised the Nifty PE-Ratio & Return analysis to include fresh data (up to December 2018). Here is How to choose the Right Term Plan, (Quoted: Hindustan Times) Emergency & Contingency Funds. The 3 year scatter plots seem to bunch into three bands. Hi Dev, I am with you on sitting out of the party for 2018. Now let’s compare this with someone who is thinking to invest at high PEs (above 24) for less than 3 years. Should I shift from Large Cap funds to Index funds? And that is not sufficient to draw out any meaningful conclusions. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine. INA100005241), SEBI Registered Investment Advisor + Financial Planner (Fee Only) || India, Full Goal-based financial planning service, Subscription Service for Asset Allocation (Equity & Debt%) management, Subscribe for Mutual Fund Recommendations, Pingback: Inflation- why we are not that worried. Unlike the last year 2018 which wasn’t a great year for the markets, even 2019 wasn’t a great year either though the index suggests a decent performance.
Get ready to sweep roads! The basic conclusion once again is the same. To arrive at some sort of conclusion and see how well or not-so-well correlated are the two things – the market’s current valuation and its future returns. What is your take on this? My answer is that no one strategy can work in all conditions. Nifty PE ratio is important as it is a measure of valuation of all the companies included in Nifty. For all your Financial Planning & Investment Advisory requirements, Talk To Us. You might find people telling you that markets can give you 15-20% returns. And all this with a standard deviation of 14.6%. Valuations of Indian equities are well below their long-period averages. Why follow tips? Also for SIP investors, it is important to understand that these returns will be different from your rolling SIP returns (but we will discuss that some other day). Refer to the table above and you will find that max is about 58.1% and min is about 5.9%. Coronavirus wrap October 29 | Maharashtra minister Dilip Walse-Patil tests COVID-19 positive; France, Germany announce fresh lockdowns. So basically, Total Returns Index or TRI is Nifty including Dividends. With that taken care off, you should try to invest more when market valuations are low. Let’s use a simple example to understand this. But the above data set and relying on a common-sense based approach to investing tells that investing at low PEs is difficult but profitable.
Any recommendations for reading on how to become a pragmatic investor? Interactive, easy to use comparisons. You shouldn’t – because it’s the average depth that is 5 feet. Nifty PE Ratio means the PE ratio of the Nifty 50 Index.