Saturday, 21 March 2015

Portfolio Strategy : Mar 20th, 2015 : Banks Battered

Since the beginning of this year, I have been placing my bets on banks, in the hope that interest rate cuts will help them to improve their balance sheets, resulting in higher earnings, and hopefully increased stock prices.  Unfortunately, after appreciating quite a bit in late January this year, the BANK NIFTY has gone through a period of high volatility, followed by almost daily declines in value over the last couple of weeks.  Here is the chart for BANK NIFTY this year

As you can see, returns have been practically flat for the 3 months of this year, after a torrid rally last year in 2014.  I have not given up hope as yet, but increasingly it looks like we will not see the bull rally of last year repeated this year.  The high volatility is good for SIP investments, if you catch the troughs in the chart for your SIP timelines.  

For now I intend to hang tough and see how things pan out in the rest of the year for the banking sector.

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