Recently, I received a thought-provoking comment on one of my YouTube videos, questioning why successful investors or professionals do not reveal the truth about the markets.
The comment highlighted concerns about the perceived impact of retail investors versus the influence of Foreign Institutional Investors (FIIs) and Foreign Portfolio Investors (FPIs). Here’s my detailed response;
The only thing that is certain and predictable is that corrections are temporary and growth is permanent. Markets cannot be predicted in the short term; the only certainty is the long-term direction of the market.
There are only two types of experts in the world:
1. Those who can't predict the market
2. Liars.
Having said that, I firmly believe that the market is more stable due to mutual fund (MF) flows and is less dependent (not independent) on foreign portfolio investment (FPI) flows. In 2008, ₹45,000 crore of FPI outflow created havoc and the broader markets corrected almost 59% in less than one year. In the current financial year, the outflow is more than ₹1 lakh crore. Despite this, we have only seen a 15% decline. Just imagine what would have happened to market levels in the absence of the ₹26,000 crore monthly inflow due to systematic investment plans (SIPs).
Those who are raising concerns about SIP closures on social media seem to ignore the month-on-month net inflow, which is increasing due to SIPs and that too with only 4.2 crore MF investors. Imagine this number reaching 10 crore in the next few years.
If you consider the MF industry educating Indian investors about the India growth story as biased and painting a falsely rosy picture, I have only one thing to say in response: wake up, man. While talking about the India growth story, no one from the industry has ever said that they can predict market movements and that the market cannot go down. If you know even simple economics, you should understand that volatility is part of the market. If you are expecting markets to grow every year in a linear fashion, you are living in la-la land.
You must pay a price to get higher returns, and that process involves being able to digest volatility and not panic during such times.
I request you to watch all my videos, which I have uploaded since 2012, and you will see that what I have written is what I have said multiple times in my past videos.
Rather than discussing the truth of the market, you should focus more on the truth about the irrational expectations of the majority of investors who do not want to face volatility and want positive and linear returns throughout the journey. It’s just like wanting to go to heaven without dying.
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1 Comment
Pulatsya
So True. Thanks for sharing.