A playbook for every market
Markets swing between expensive, fair, and cheap. We don't predict which comes next — we decide in advance what to do when each arrives, so no plan depends on nerve in the moment.
How we pick schemes.
Every fund we recommend passes a clear, repeatable filter — no stories, no trends, just the numbers that predict consistency.
Equity & hybrid funds
- Performance should be better than the benchmark on a 5-year and 10-year basis.
- It should be in the 1st quartile on a 5-year and 10-year basis in its category.
- Sharpe ratio — the return earned per unit of risk taken.
Debt funds
- Performance should be better than the benchmark on a 1-year and 3-year basis.
- It should be in the 1st quartile in its category on a 1-year and 3-year basis.
- Macaulay Duration — the weighted average time to receive the bond's cash flows.
- Average Yield to Maturity — the expected annualised return if held to maturity.
Ongoing monitoring
After investment, we watch for any fundamental shift in the management of the fund — a change in fund manager, a change in investment style, or a drift from the stated mandate. If any of these happen, the fund goes back under review.
How to outperform direct plan of a scheme with regular plan or how to maximize your return in a particular scheme by almost 2-3% and improve your net CAGR and XIRR.
- Your asset is NAV of the scheme multiplied by the total number of units you have aquired.
- Suppose you are doing SIP of 10000 rupees in a scheme.
- You have to divide your SIP in two parts, First part would be the target scheme, where 80% i.e. 8000 rupees will be invested. And second part would be the Liquid Fund (where historical return vary between 4-8% depending on RBI repo rates), where 20% i.e. 2000 rupees will be invested.
- When the benchmark corrects by 5%, then you should switch 30% of your accumulated liquid fund to the targated scheme.
- when the benchmark corrects by 10-15%, then you should switch 70% of the remaining liquid fund to the targated scheme.
- When the benchmark corrects by more than 25%, then you should switch 100% of the remaining liquid fund to the targated scheme.
What to do when the benchmark is Overvalued, Fairly valued, or Undervalued
A benchmark's valuation is a guide for deciding how aggressively to invest, rebalance, or deploy fresh money — not a signal to start or stop investing altogether.
When the benchmark is Overvalued
Don't automatically stop your SIP. A better approach is:
- Continue existing SIPs to maintain discipline.
- Reduce or delay large lump-sum investments.
- Keep some cash/debt allocation available for future opportunities.
- If the fund has become substantially overweight because of market appreciation, rebalance toward your original asset allocation.
- For new money, consider STP from a liquid/debt fund into equity over several months rather than investing everything at once.
Example: if your target equity allocation is 60%, and a strong market rally takes it to 70%, you could rebalance toward 60% rather than trying to predict the exact market top.
When the benchmark is Fairly valued
This is generally the neutral zone.
- Continue SIPs normally.
- Lump-sum investment can be made according to your asset-allocation plan.
- No strong reason to dramatically increase or decrease equity exposure purely because of valuation.
- Rebalance periodically.
When the benchmark is Undervalued
This is where valuation-based investing can become particularly useful. You could:
- Continue your normal SIP.
- Deploy additional cash gradually.
- Increase equity allocation if your risk tolerance and investment horizon allow it.
- Consider larger STP/SIP instalments over a defined period rather than trying to identify the exact bottom.
- Rebalance from debt/cash toward equity if equity has fallen below your strategic allocation.
The key is not to wait for the perfect bottom. Markets can remain undervalued for a considerable period.
Building the corpus.
The accumulation phase is the decade-plus stretch where your money has time on its side. The priority here is consistent investing, tax efficiency, and the discipline to let compounding work without interruption.
- Start with SIPs sized to your surplus — a realistic amount you can sustain for years without interruption.
- Keep equity allocation high (70–80%) while the horizon is long; let compounding do the heavy lifting.
- Step up SIPs each year with your income — even a 10% annual increase compounds dramatically over decades.
- Park lump sums (bonus, inheritance) in liquid or ultra-short-term funds first, then deploy via STPs over 3–6 months.
- Review the portfolio once a year — rebalance when allocation drifts, but resist the urge to churn.
Strategy on SWP (Systematic Withdrwal Plan) and IDCW (Income distribution cum withdrawal)
SWP scenarios
- If the corpus is accumulated using SIP
- If you do not want to switch scheme as it attracts Capital gain taxes.
IDCW scenarios
- If the corpus is being created using lumpsum investment.
- The dividend amount should not cross the total income of Rs 12 Lacs, as it will attract taxes. If the individual has other income sources which are being reported in ITR then it should be: Income 1 + Income 2 + ....+ dividend on IDCW = 12 Lacs.
Using capital gain tax exemption to increase capital base every year.
- Capital gain on equity funds are exemted upto Rs 1.25 Lacs.
- Thus Upto Rs 25000 can be saved every year.
- This strategy present us two oppertunities, 1) Capital base can be increased Rs 1.25 Lacs every year, 2) Fund switching oppertunity, if some bad scheme was opted because of poor advice or social media influence.
Where do you fit in?
Ten questions across four sections — tell us about your goals, risk appetite, and investing habits. We'll follow up with a personalised recommendation.