Retail investors would have done well to stay away from the equity markets last year as they only delivered a 9 per cent return in 2013.
According to leading domestic brokerage Motilal Oswal, Indian equities delivered a 9 per cent return with the entire gains being clocked in the fourth quarter of the year. This make investing in fixed deposits a much safer bet with the same returns.
Commenting on the Motilal Oswal analysis, Mumbai-based investment advisor S P Tulsian said, “Investors rush to the markets hoping to make 90 per cent and they land up making 9 per cent. This makes it even clearer that investors should not put in more than 25 per cent of their savings into equities”.
The analysis said that top performers were the beneficiaries on the rupee depreciation and include technology (+60 per cent), telecom (+26 per cent) and healthcare (+23). Among the worst performers during 2013 ranked real estate (-32 per cent), public sector banks (-26 per cent) and cement (-14 per cent).
Market participants, however, say there are other aspects to this 9 per cent return.
“First, this 9 per cent return has come on the back of a 26 per cent return in 2012 so last year was particularly bad. Second, the return may be in line with fixed deposits however that instrument implies a tax burden according to your tax bracket whereas you don’t get taxed if you hold your stocks for a year,” said Sharekhan’s head of research Gaurav Dua.
Average market volumes in 2013 were higher than the last year. The analysis said, foreign institutional investors another $20 billion in 2013 making it the third biggest year of inflows while domestic institutional investors withdrew a record $13 billion in 2013.
Among individual stocks, the analysis said TCS was the best performing Sensex stock with a 72 per cent return. Both Sun Pharma and Infosys gave returns of over 50 per cent.
As far as underperformers are concerned, SBI and BHEL were the top underperformers with negative returns of 26 per cent and 23 per cent.
According to leading domestic brokerage Motilal Oswal, Indian equities delivered a 9 per cent return with the entire gains being clocked in the fourth quarter of the year. This make investing in fixed deposits a much safer bet with the same returns.
Commenting on the Motilal Oswal analysis, Mumbai-based investment advisor S P Tulsian said, “Investors rush to the markets hoping to make 90 per cent and they land up making 9 per cent. This makes it even clearer that investors should not put in more than 25 per cent of their savings into equities”.
The analysis said that top performers were the beneficiaries on the rupee depreciation and include technology (+60 per cent), telecom (+26 per cent) and healthcare (+23). Among the worst performers during 2013 ranked real estate (-32 per cent), public sector banks (-26 per cent) and cement (-14 per cent).
Market participants, however, say there are other aspects to this 9 per cent return.
“First, this 9 per cent return has come on the back of a 26 per cent return in 2012 so last year was particularly bad. Second, the return may be in line with fixed deposits however that instrument implies a tax burden according to your tax bracket whereas you don’t get taxed if you hold your stocks for a year,” said Sharekhan’s head of research Gaurav Dua.
Average market volumes in 2013 were higher than the last year. The analysis said, foreign institutional investors another $20 billion in 2013 making it the third biggest year of inflows while domestic institutional investors withdrew a record $13 billion in 2013.
Among individual stocks, the analysis said TCS was the best performing Sensex stock with a 72 per cent return. Both Sun Pharma and Infosys gave returns of over 50 per cent.
As far as underperformers are concerned, SBI and BHEL were the top underperformers with negative returns of 26 per cent and 23 per cent.
