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Are Markets actually on lifetime highs ?

I have a lot of queries coming in from our clients from fast few days regarding the same thing, they are confused that inspite of markets trading at life time highs their mutual fund portfolios are not performing as per the markets. Although I have explained it numerous time individually & in our Investor education whatsapp group but still new queries keep coming in.

So I am trying to explain here again what is the actual situation of markets & I hope this will address the issue for my clients as well as other mutual fund investors.
The answer is pretty simple, In January 2018 all the indices I.e Nifty (large cap), Midcap & Smallcap were trading at same levels percentage wise, it is marked in yellow circle in above chart. From there when the markets started correcting Nifty, mid & small cap all started correcting but in a few months time Nifty detached itself from the fall & started moving sideways whereas mid & small caps continued their downtrend.

Final lows of Small & Midcap Indexes were made on 22nd August 2019, whereas lows of Nifty were made much earlier on 26 October 2018.

Now as on 13th January 2020 Nifty has crossed it previous highs made in January 2018 which were levels of 11100 on weekly closing basis whereas both Midcap & Smallcap indexes are still down 20% & 37% respectively from their lifetime highs on weekly closing basis.

So how some markets are being seen at lifetime highs ???

That’s because majority of people track markets on the basis of Nifty & Sensex only & right now they are not representing true picture of markets or we can even see it as Nifty is giving indications of future trend of markets I.e both mid & small caps will catch up soon. This has happened number of time in past as well & generally in these kind of situations mid & small cap catch up with the main trend that is of Nifty/Sensex.

Also if we analysis long term charts of these 3 indices then we will find that whenever such deviation of main trend happens between all these indices then mid & small caps catchup with main trend & many a times it leads to start of a new bull run. Same thing happened in August 2013 when Nifty was outperforming Mid & Small Cap Indexes & we all know what happened after that, Small & midcaps soon catches up with Nifty & even crossed it to give stupendous returns in coming years.

Am I the only one hearing the opportunities ringing ???

Note : This is in no way any recommendation to buy/sell recommendation, please consult with your financial advisor before making any investment decision.

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