The Markets Want Your Money. Don't Give It to Them.
The Indian share markets fell, quite dramatically, and yet nobody is worried.
Already the markets seem headed back up. The BSE Sensex price-to-earnings is still way too high (about 24x). And people are still shouting about 'buying the crash'.
Just take a step back, and you'll realise how we got here.
You only need look at recent mutual fund data to get a feel for the excitement in the air...
New fund offers (NFOs) in the equity mutual fund industry hit a 10-year high of Rs 223 billion in 2017. At about Rs 3.8 billion, the average NFO size is also the highest since the glory days 2007-08.
NFOs are new schemes started by MFs inviting people to invest in them for the first time. And to flourish, NFOs need not just investors, but extremely excited investors.
Just how excited are investors nowadays?
Enough that NFOs' contribution to total MF sales has increased almost four-fold - to a whopping 14.7% in 2017 from just 4.6% in 2016. Interestingly, NFOs had just about gone extinct as recently as 2011-12.
Overall net investment (sales minus redemptions) in MFs has also been breaking new records these days:
And, of course, MFs are having a gala time taking all this money from over-eager investors and funnelling it into equities.
Happy Investing
The Indian share markets fell, quite dramatically, and yet nobody is worried.
Already the markets seem headed back up. The BSE Sensex price-to-earnings is still way too high (about 24x). And people are still shouting about 'buying the crash'.
Just take a step back, and you'll realise how we got here.
You only need look at recent mutual fund data to get a feel for the excitement in the air...
New fund offers (NFOs) in the equity mutual fund industry hit a 10-year high of Rs 223 billion in 2017. At about Rs 3.8 billion, the average NFO size is also the highest since the glory days 2007-08.
NFOs are new schemes started by MFs inviting people to invest in them for the first time. And to flourish, NFOs need not just investors, but extremely excited investors.
Just how excited are investors nowadays?
Enough that NFOs' contribution to total MF sales has increased almost four-fold - to a whopping 14.7% in 2017 from just 4.6% in 2016. Interestingly, NFOs had just about gone extinct as recently as 2011-12.
Overall net investment (sales minus redemptions) in MFs has also been breaking new records these days:
And, of course, MFs are having a gala time taking all this money from over-eager investors and funnelling it into equities.
Happy Investing
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