SIP |  SIP Investment: ETMarkets Mid-year Survey: Bear run flushes weak hands out of D-St;  SIP investors hold stronghold for now

SIP | SIP Investment: ETMarkets Mid-year Survey: Bear run flushes weak hands out of D-St; SIP investors hold stronghold for now – Mail Bonus

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NEW DELHI: Recently, many investors who took a dip in the stock market, all alone, faced probably the first correction in the market.

Analysts in the ETMarkets mid-year survey said that while some of these investors had indeed been shaken and could avoid investing more in equities for the time being, the retail flow into mutual funds through SIPs has been strong.

However, some experts believe that they may also see some slowdown, as the effects will only be visible with a delay.



Weak hands have already been shaken out, said Yesha Shah, head of equities research at Samco Securities, who pointed out that the volume of NSE money was close to that in April 2020.

“This indicates that market interest has declined significantly. In addition, the number of NSEs traded above the 200-day simple moving average (SMA) has fallen to 13.7 percent from 96 percent in June 2021. While Covid broke out in March “By 2020, only 10 percent of equities were above 200 SMA. So now the fear of investing new capital seems great,” she said.

Retail investors who have not posted a profit so far have been hit by a steady fall in prices, said Deepak Jasani, head of retail research.

stocks. If they have taken out a loan to invest in stocks or have overweighted stocks in their portfolio, they would want to stay away from the stock markets, he said.

“Other investors who have been skeptical about the rise so far will have the opportunity to enter the market at a lower valuation. However, the wait for attractive levels could be long and if they do not invest in or around the bottom, they could continue to wait. next autumn to invest.We will continue to have a new crop of investors entering the labor market or starting to earn year after year.However, it may not be possible to replicate the number of new retail numbers and inflows we received in Covid, he said.

This market correction could be the first such period for many new investors after the Covid era, when many investors entered the market for the first time either directly or through a mutual fund route, said Roop Bhootra – Investment Services CEO at Anand Rathi Shares.

“For direct equity investors, there could be some panic, especially those who are not getting help with quality research and advice. However, there is some panic among indirect investors if you see monthly MF flow data. In terms of sustainability, Rs 11,000-12,000 million are monthly. “SIP flow is sticky. In the long run, we expect to see a gradual increase in SIP flow,” said Bhootra.

Data showed that in May saw Rs 12,286 million in SIP inflows, higher than Rs 11,863 million in April, and FY23 SIP inflows Rs 24,149 million. SIP flow stood at Rs 1,24,566 million on FY22 against Rs 96,080 million in FY21. SIP accounts stood at 5.48 million at

At the last count, there were 10.88 billion registered investors in BSE.

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Across any bear market, weak hands are moving out, said Pankaj Pandey of ICICIdirect.

“But we have to understand that total equity holdings have doubled in the last two years. Most of the same is due to financial awareness. Thus, since New Year’s investors will be aware of various asset classes, we expect them to hold on and we believe this. that will keep the retail flow resilient, “said Pandey.

At the time of writing, BSE was reduced by 10.25 percent; The BSE Midcap Index has fallen by 13.8 percent while the BSE Smallcap Index has fallen by 16.72 percent so far in 2022. Retail investors generally invest more in midcap and smallcap equities.

“There is a direct correlation between retail investment and market returns. Therefore, the inflow of retail sales will undoubtedly decrease in the medium term, given that many new investors will see a bear market for the first time,” said Vinit Bolinjkar, head of research.

Stocks.

Think of this process as volatile in nature,

Securities, said that since new investors are born with every bull market and with every bear market, the investment cycle of many new investors is over.

“After the pandemic, this is the first major correction, although we will not call it a normal bear market. Weak hands are beginning to move out of the markets and this is not just for direct equity, but the pain will soon find itself in the form of reduced cash flow in mutual funds “Retail flows have taken on the role of financial companies. Retail flows are in direct proportion to market policy but with a delay effect of several quarters,” the broker said.

There will surely be a turnaround, there will be a change, said Nishit Master, portfolio manager at Axis Securities, which expects weak hands to move out of the market.

“This time it has been delayed because a large part of new retail investors started investing in markets in the depths of the Covid crisis and are still in the money. But we expect some upswing there. There is a high probability that the retail flow will start to decrease. “In the near future, more and more retail investors will lose out on the initial amount invested. Hopefully, the outflow of FPIs will also slow down by then.”

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

.

“We anticipate that more and more weak hands will move out of the market, but nonetheless its scale will be less severe compared to previous bear markets as investor education and awareness have improved recently and investors have realized the importance of buying dip policy, “he said.

(Disclaimer: The opinions, suggestions, opinions and opinions of the experts are their own. This does not represent the views of the Economic Times)

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