Value Investing in MF & BLTP

In today’s market condition last 3 years SIPs are generating lower returns than FDs. A big question is arising that, if SIP/STP is not working, then what strategy should be using for investment, which would be a better performer than SIPs/STPs and also with sufficient safety.

Warren Buffet, Benjamin Graham and so many other all-time renown investors have proven that, Value investing is the best theory for investment. Applying Value Investing is very much complicated, even for hard core professionals. It is tough, because it requires, too much data, thoroughly accounting and business understanding, by using which one would derive the instinct value to identify the value-stock. For individual investors it is next to impossible because it requires too much time and knowledge, which they don’t have.

Then what to do?

When you do not have knowledge, what are you doing? You are appointing a person, who has that knowledge. In an investment use Mutual Fund. Pay the salary to Fund Managers and Advisors, in the forms of Fund Management charges and Commission or Fees. This way you will be relaxed. Don’t try to save commission, if you don’t have proper understanding of the market movement and do not have control over your emotions otherwise you will realise this after losing money that by playing with the market the commission which you have saved is much much lesser than what you have lost in the market.

Adopting Value Investing Strategy is the best theory, which has the highest rate of success even in mutual funds also. Value Investing has one more positive feature that, it will provide you better protection against losses due to disruption in the market.

How is it possible, to implement Value Investing in Mutual Funds?

That is done in 3 levels

1. By Fund Manager, in the stock market, by picking proper stocks.
2. By Advisors, selecting proper fund having good track records.
3. By Adopting a proper strategy for investment which would protect Investors’ hard-earned money.

I am calling it Triple Filtered Strategy

In Mutual Fund investment you cannot instruct the Fund Manager because they have their own strategy for beating the benchmark. On the bases of that the funds track record is build that’s why you will have to select fund having a good track records. But this is also not sufficient for beating the track records in terms of return

Then how we can do this?

We should use proper Investment Strategy to deploy your money in the market.

Remember that We cannot generate higher returns just by investing more money, this can be achieved only by managing the risk, by investing the right amount at the right time.

Now it becomes very difficult for everyone, what is the right time? And what is the right amount? How can we decide? For that we require the knowledge, of market volatility and risk involved, in the current market situation. This can be done, by adopting proper strategy to deploy investors’ money in the market, by the advisors.

Based on this requirement, we have developed a new strategy called “BLTP- The NeXT Gen Investment Strategy” In this strategy we are following the approach suggested in “The Intelligent Investor” and tracking the Margin Of Safety. We know that once you achieve the Margin Of Safety you will be the winner in the market.

Now the question is how can we achieve the Margin Of Safety?

For that we have taken 6 parameters of the market. Namely

1. Nifty.
2. Nifty PE.
3. Nifty PB.
4. Nifty Div Yield.
5. NAV of the Scheme, in which we are investing.
6. And most important, Inception of your investment.

By using these parameters we are deriving The Risk Factors involved in the market, and by considering that risk we are deriving the correct amount to be invested in the equity.

One popular financial proverb says that “Money you saved is Money you earn” we have twisted it, like this “Money you saved from Losses, will Earn more Money for you”.

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