Simple. Basic. Straightforward. Long Term.
We believe that Index Fund investing is the most superior method of investing in Public Equities. In the long run, Index Funds generate better returns for investors than most actively managed funds.
"Don’t look for the needle in the haystack. Just buy the haystack!"
- John C. Bogle (Founder, The Vanguard Group. Credited for the creation of the Index Fund)
Successful Investing is all about common sense. As Warren Buffett, the Oracle of Omaha, has said, it is simple, but it is not easy. Simple arithmetic suggests, and history confirms, that the winning strategy for investing in stocks is to own all of the nation’s publicly held businesses at very low cost. By doing so you are guaranteed to capture almost the entire return that these businesses generate in the form of dividends and earnings growth. The best way to implement this strategy is indeed simple: Buy a fund that holds this all-market portfolio, and hold it forever. Such a fund is called an index fund. - Little Book of Common Sense Investing by John C. Bogle
When trillions of dollars are managed by Wall Streeters charging high fees, it will usually be the managers who reap outsized profits, not the clients. Both large and small investors should stick with low-cost index funds.- Warren Buffett
Buffett has instructed the trustee in charge of his estate to invest 90% of his money into the S&P 500, and 10% in treasury bills, for his wife after he dies. “I just think that the best thing to do is buy 90% in S&P 500 index fund.”
"Don’t look for the needle in the haystack. Just buy the haystack!"
- John C. Bogle (Founder, The Vanguard Group. Credited for the creation of the Index Fund)
Successful Investing is all about common sense. As Warren Buffett, the Oracle of Omaha, has said, it is simple, but it is not easy. Simple arithmetic suggests, and history confirms, that the winning strategy for investing in stocks is to own all of the nation’s publicly held businesses at very low cost. By doing so you are guaranteed to capture almost the entire return that these businesses generate in the form of dividends and earnings growth. The best way to implement this strategy is indeed simple: Buy a fund that holds this all-market portfolio, and hold it forever. Such a fund is called an index fund. - Little Book of Common Sense Investing by John C. Bogle
When trillions of dollars are managed by Wall Streeters charging high fees, it will usually be the managers who reap outsized profits, not the clients. Both large and small investors should stick with low-cost index funds.- Warren Buffett
Buffett has instructed the trustee in charge of his estate to invest 90% of his money into the S&P 500, and 10% in treasury bills, for his wife after he dies. “I just think that the best thing to do is buy 90% in S&P 500 index fund.”
Refined Index Fund. Buy India. The Best of India
Usually while buying an Index Fund, for example the S&P500, BSE500, Nifty, or Sensex, one usually ignores some of the rotten apples or bad fish out of the large net of stocks. Thus, to maximise return, it is essential to filter out some of the fundamentally weak companies and just keep the winners. It is important to know why each stock exists in the large net of 100, 250,500, or 1000 stocks.
"Know what you own, and why you own it". - Peter Lynch
We use an algorithmic based scoring system that ranks each company listed on the public exchange of India (NSE & BSE) based off a wide range of metrics. Using these metrics, we rank each listed Indian Company from 1 to 5000...
Some people may have a misconception that choosing 20-30 stocks is the ideal portfolio size to beat the Index in the long term. This might hold true if the person managing your money or selecting those 20-30 stocks is Warren Buffett, Jim Simons, or Rakesh Jhunjhunwala. However, we assume that the probability to replicate the growth of such an investor is next to impossible.
From 1970-2016, only 2 out of 355 Equity Funds in USA outperformed the S&P500 by 2%. About 281 (80%) of the 355 funds went out of business in this 46 year period. 8 gave a return exceeding the S&P500 by 1-2%. Rest all generated a return below the S&P500. The top long term winner among the 2 that beat the S&P500 was Fidelity Magellan Fund. The Fidelity Magellan Fund shined during 1977 to 1990 when it was managed by Peter Lynch. While managing the fund, Peter Lynch held as many as 1,400 stocks at one time...
We are always growing, learning, and drawing inspirations from the top investors and money managers in the World. We follow a steady, simple, and common sense style of investing.
"Know what you own, and why you own it". - Peter Lynch
We use an algorithmic based scoring system that ranks each company listed on the public exchange of India (NSE & BSE) based off a wide range of metrics. Using these metrics, we rank each listed Indian Company from 1 to 5000...
Some people may have a misconception that choosing 20-30 stocks is the ideal portfolio size to beat the Index in the long term. This might hold true if the person managing your money or selecting those 20-30 stocks is Warren Buffett, Jim Simons, or Rakesh Jhunjhunwala. However, we assume that the probability to replicate the growth of such an investor is next to impossible.
From 1970-2016, only 2 out of 355 Equity Funds in USA outperformed the S&P500 by 2%. About 281 (80%) of the 355 funds went out of business in this 46 year period. 8 gave a return exceeding the S&P500 by 1-2%. Rest all generated a return below the S&P500. The top long term winner among the 2 that beat the S&P500 was Fidelity Magellan Fund. The Fidelity Magellan Fund shined during 1977 to 1990 when it was managed by Peter Lynch. While managing the fund, Peter Lynch held as many as 1,400 stocks at one time...
We are always growing, learning, and drawing inspirations from the top investors and money managers in the World. We follow a steady, simple, and common sense style of investing.
Fees Matters. Compounding. And its Miracles.
Every 1% Matters - At Least in the Long-Term
"Compounding interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it." - Albert Einstein
In the long run, each percent compounded matters. That percentage can can be added by choosing a smarter index fund (that beats the general index) or subtracted by avoiding large management fees & % of profits charged by Portfolio Managers, Mutual Funds, AIFs etc.
The table below highlights how each percent matters and what an investment of Rs.10,000 would have turned into had it given a return on 10%, 11%, 12% CAGR respectively. At the end of 60 years, Rs.10,000 would be Rs.30 Lakhs (at 10%), Rs, 52 Lakhs (at 11%), and almost Rs.90 Lakhs (at 12%). This means that a 2% difference can change the value of returns by 3 times in value in 60 years (from 10% to 12%).
The table below highlights how each percent matters and what an investment of Rs.10,000 would have turned into had it given a return on 10%, 11%, 12% CAGR respectively. At the end of 60 years, Rs.10,000 would be Rs.30 Lakhs (at 10%), Rs, 52 Lakhs (at 11%), and almost Rs.90 Lakhs (at 12%). This means that a 2% difference can change the value of returns by 3 times in value in 60 years (from 10% to 12%).
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In the last 100 years, the S&P500 (which tracks the performance of the Top 500 companies in the US) has returned about 10% (including re-investing of dividends). A $10,000 investment would have turned into $137 Million in 100 years at 10% whereas 11% would have turned that into $340 Million and 12% would have turned into $835 Million.
Returns & Comparison
"With a good perspective on history, we can have a better understanding of the past and present, and thus a clear vision of the future." — Carlos Slim Helu
Backtesting and using data from the past in all scenarios can help conclude that our data points (fundamentals, value, and other metrics) help rank all the companies efficiently and also generate a significant alpha over the traditional indices.
Backtesting and using data from the past in all scenarios can help conclude that our data points (fundamentals, value, and other metrics) help rank all the companies efficiently and also generate a significant alpha over the traditional indices.
Return of Current Popular Indices:
Through this data, it is clear that the algo ranked Smart Beta Index beat all the current indices above in most time periods.
