Can ‘SILVER’ Become ‘GOLD’

While investors' interest in gold is soaring, it’s also a great time to look at silver as a compelling alternative.

  • Silver demand has outpaced supply for the 4th consecutive year.
  • Gold to silver ratio is at 88:1 well above the long-term average of 65:1 indicating that silver is undervalued.
  • Indicators suggest that silver still is relatively attractive v/s gold and like gold silvers extended up more still pending.

Why Now?
Silver offers a more attractive entry point relative to gold and could be the undervalued gem in your portfolio.

Word of Caution
Silver is a very volatile commodity and often moves wildly. It is not for everyone, especially not for the faint hearted. Most investors are better off having it as part of a Multi Asset Allocation strategy through an MF.

For others who understand these nuances having some exposure to this commodity using silver FOF could make sense.

Silver currently trades at  $ 32.9/ troy, ounce and rupees 96000 per kg.

 

Blog by Mr.Santosh G Akerkar for education and awareness purposes.
Best Regards,
Santosh Akerkar

On Checking Your Portfolio

An example from Taleb
“ Over short time increment, one observes the variability of the portfolio, not the returns.”
--Nassim Taleb

In his book, Fooled by Randomness, he gives an interesting example.
A 15% return with a 10% volatility per annum translates into a 93% probability of a success in any given year.
This means if you check your portfolio once a year, there is a 93% probability of seeing a positive result.
If you check the portfolio every day, then there is only 54% probability of seeing a positive result.
For one month, it is 67% and for one quarter it is 77%. Seeing negative results in portfolio would trigger. Unpleasant emotions resulting in inappropriate action. That’s why most investors are unable to stay the course.
If you see your portfolio only once a year, the probability of negative results come down significantly. This would ensure that you have sufficient emotional strength to stay the course.
From 1979-80 to 2015-16, for the last 46 financial years, we had 31 years of positive Sensex returns and 15 years of negative returns. So since 1979 the Indian Stock Market has produced an annual gain 68% of the time or 31 times while losing ground just 15 times.
So even in real life scenario, if you check the portfolio once a year, the probability of seeing a positive return is high.
So don’t check your portfolio frequently.

P.S. - Honest confession I check or review my and family portfolio twice in a year.

A blog from Santosh G Akerkar. For Educational and Awareness purposes.
Best Regards,
Santosh Akerkar

What to do in market decline?

Very few areas in life rewards you doing nothing, Investing is one such..........

• Nature of Equity is volatility. It will go up and down. It creates opportunities for smart investors to make money wealth in long term.

• It all started on 26th March 2020. Sensex 26,000 (covid bottom) to 86,000 (26th September 2024), Equity market rallied more than 300% in less than 5 years. So now equity markets are taking breather.

• Those who invested in covid crisis (2020), ILFS crises (2018, currency and BoP crisis (2013), GFC (2008) made money so always remember, one should invest aggressively when there’s blood on the street.

Bottomline is – When everybody is fearful, you should buy.

---- Important Action or checklist

• One should check your Asset Allocation 100% Equity or 100% Real estate or 100% fixed income are not advisable.
- Need to maintain Balance
- Follow proper Asset Allocation
- Know your Asset Allocation

• Don’t track your portfolio on daily basis. Monthly or quarterly basis is fine.
Other wise you will end up taking wrong decisions in panic.
In covid few people exited at the bottom and missed the rally.

• Market predictions is difficult so don’t waste your time in timing the market.
- Focus on Time in the Market.

* Consolidate your investments under the one roof.
Don’t keep multiple Demats as well as multiple Mutual Fund focios with different distributors.
Try to consolidate your shares and MFs under one roof. It’s good for review and future transactions as well.

* If there’s any question its important to talk to your advisor.
Experience advisor can add value to your portfolio and wealth creation journey.

* Corrections is the best time to Add your Sip or to do lumpsum investments .

 

A blog from Santosh G Akerkar. For Educational and Awareness purposes.
Best Regards,
Santosh Akerkar

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