Nifty, Sensex rally 25% in Samvat 2080 on macro trends: What should be your trading strategy for Samvat 2081?

In Samvat 2080, the Indian market seen sharp rally supporting with strong economic environment in the country. The Nifty 50 surpassed 26,250 and BSE Sensex surpassed 85,900 in September 2024, with both Indexes gaining around 25 per cent during Samvat 2080. The BSE Midcap and Smallcap Index outperformed and gained 45 per cent and 50 per cent respectively.

Corporate earnings growth momentum, strong GST collection, Capex cycle revival, Favourable Monsoon, and robust domestic demand are positive factors, While positive global clues along with strong liquidity through Mutual funds remained supportive factors for the market. 

The recent surge in crude oil prices, global economic slowdown worry and geopolitical concerns are potential near-term uncertain risks for the overall GDP growth of the economy. The Indian market (benchmark index Nifty) has risen by approximately 25% (as of October 17, 2024) since last Diwali, while the global market particularly major US indices has also increased in range of around 27%-35% during this period.

What should be your trading strategy?

Swapnil Aggarwal, Director, VSRK Capital. on

SIP Your Way to Financial Freedom: Small-Cap and Mid-Cap Funds hold the key

With Diwali around the corner, it’s an ideal time to reflect on your financial goals and consider investing in Systematic Investment Plans (SIPs). Particularly in small-cap and mid-cap mutual funds, SIPs can help you build significant wealth over the long term if you’re prepared to embrace some level of risk.

Starting early in your career gives you the advantage of time. By consistently allocating 20-25% of your monthly income into SIPs, you can tap into the growth potential of small and mid-cap funds, which historically offer a CAGR of 15-18%. Over a span of 10, 15, or even 20 years, this disciplined approach can lead to substantial wealth accumulation. Although small-cap investments are higher in risk, they present immense potential for long-term wealth creation.

The small-cap and mid-cap sectors, while inherently riskier, are well-suited for long-term investors looking to generate significant returns. These funds are expected to outperform others in the coming decade, making them an attractive option for those with a higher risk tolerance. They can serve as powerful vehicles for achieving long-term financial goals, such as retirement or other major life milestones.

However, while focusing on high-growth small-cap funds, it’s wise to maintain a diversified portfolio that includes large-cap and mid-cap funds. This strategy can help balance your risk profile, ensuring stability and minimizing potential losses during market downturns. When selecting mutual funds, prioritize those with a proven track record of consistent performance over 5-10 years and look for options with low expense ratios to maximize your returns.

This copy is being updated