Neutral Way of Investing

 

Most investors would have been in a dilemma when they decide to invest. Whether to invest today or bit later. Should I invest one shot or do a SIP. But the returns they would have made is known only in hindsight. If it is good – they could claim they made right decision and if is bad they blame it on the market.

For instance, Sensex was 85930 on 26^th Sept 2024. And it is 85706 on 28^th Nov 2025. In between, it touched as low as 71425 on 7^th April 2025. While it is a 0% return over 14 months, it is a 20% return from the bottom of the market. Though the return from the bottom looks attractive, the point to point return  of 0% over a one year period is hard to stomach – for most investors. A one time investment in most mutual funds delivered bit better returns, it is far lower than investors expectations - after few years of great returns.

The period of nil returns or low returns are typically years of consolidation. This usually happen after few years of great returns. Incidentally the interest to invest is high after such years. While there is nothing wrong with expectations, it is better to be realistic and take a cautious approach to investing.

For instance, a monthly SIP would have fetched us far better return (if not the best return) than the NIL return – since you would have invested through the ups and downs of the market. At the end… it is better to get something rather than nothing. Though boring, it is better to invest in neutral way.