We continue to remain invested in high quality small and mid cap companies with strong fundamentals and increase allocation in these companies in case of fall in stock prices during market correction.We believe any major correction in current market must be considered as a buying opportunity. We expect cyclical stocks with strong fundamentals will continue to outperform going forward considering ease in interest rates, stable crude oil prices and higher spending.
Overall market sentiments were bullish since beginning of this year with continuation of positive news flows like uptrend of global recovery, decline in inflation, progression of good monsoon in the country and interest rate cut by RBI. With continuous buying by domestic Institution investors backed by strong retail inflows, Nifty moved above the psychological mark of 10,000 in the month of July. Currently, the PE ratio of Nifty 50 stocks is around 25.5 and is trading well above its historic average. However, with expectation of increase in earning growth in coming quarters which mainly got delayed due to demonetisation and later due to GST implementation, Nifty is expected to trade at similar valuations going forward.
High quality companies reporting 20-30% + annualized growth can deliver exceptional returns for the shareholders in long term. In case you have not yet started building a portfolio of high quality and high growth stocks for long term wealth creation, please find below the Wealth-Builder portfolio allocation for your reference.
Since inception, our Wealth-Builder portfolio has outperformed Nifty and Sensex by wide margin. Since 1st Jan 2013, Nifty has given returns of 66.9%, Sensex returns is 61.8% where as our Wealth-Builder portfolio has given returns of 346.5% to our members.
In terms of performance, 7 top performer stocks out of 16 of Wealth-Builder portfolio have given returns in the range of 90% to 735% since 1st Jan'13 that too when many of these stocks out of 15 were added in portfolio during last couple of years. Moreover, 10 stocks out of 16 have made 52 week high / all time high recently. We continue to hold these stocks as we believe these companies are registering good growth every quarter and doing all the right things to continue delivering robust top line and bottom line with strong operating margins.
There were few laggards also which have not performed up to our expectations and we exited these stocks and allocated the available funds to other good investment opportunities to ensure that Wealth-Builder portfolio continue to outperforms major indices by wide margin.
Note: Wealth-Builder portfolio update - Sept 2017 will be released on 10th Sept'17 (by end of the day) and we will share the same with our Wealth-Builder members.
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