Market Outlook from WeekendInvesting as on 26th Aug 2023

This is a weekly report that provides insights into the market and offers updates on rebalances and strategies. Whether you’re a long-time follower or new to this report, it serves as an essential resource to stay informed about the market and make informed decisions.

In terms of market performance, Nifty has been hovering around 19300 levelsfor over a month, but for the first time, it closed below this level. The US markets’ weakness, driven by the possibility of rate hikes, has affected market sentiment. Despite good results from companies like Nvidia, the overall market remained flat for the week. However, the broader market, including mid and small caps, has shown resilience and remained positive over the long term.

Among the sectors, private banks, public sector enterprises, and IT stocks performed the best, with gains ranging from 0.9% to 1.6%. Meanwhile, pharma and energy sectors experienced losses. Overall, most sectors performed well for FY 2024, with solid double-digit growth. This indicates a healthy market trend and reflects the potential for growth in the coming months.

The Weekend Investing strategies have shown strong performance, with notable gains in Mi ST ATH and Mi ATH 2. Mi ATH 2, which initially faced challenges, has recovered remarkably and achieved a 30% gain this financial year. This strategy’s resilience highlights the robustness of the Weekend Investing strategies, which have undergone rigorous testing before launch.

Spotlight – Mi 35 smallcase!

Mi 35, a weekly rebalance strategy focusing on 35 stocks, has consistently performed well in the small-cap space. Diversification plays a crucial role in small-cap strategies due to the higher risk associated with individual stocks. By rotating into the strongest portion of the universe, this strategy demonstrates the power of adaptive investing and has outperformed broader small-cap indices.

A case study from the winners of this strategy highlights the journey of the stock MAZDOCK, which has delivered significant gains since its inclusion in the portfolio. Despite concerns about entering at the top of the move, the stock’s price has risen from 354 levels to 1839 levels, showcasing a remarkable 419% gain. This demonstrates the importance of following the momentum of stocks rather than trying to predict their tops or bottoms. Momentum investing allows the strategy to determine the right time to buy and exit, ensuring maximum returns for investors.

It is crucial to have a long-term vision when investing in strategies. The Weekend Investing strategies have consistently delivered strong returns over the years. Mi 35, for example, has gained 64% since going live, outperforming the index despite having a diversified portfolio of 35 stocks. This highlights the power of momentum strategies and the potential for significant returns over time.