Introducing All Weather Investing
In India, the rate of increase in the prices of goods and services has always been very high as compared to the returns generated by the money invested in bank fixed deposits and other traditional products. Thus, anybody using only such investment products is actually becoming poorer instead of building wealth. So, what is the solution?
Stocks? Yes, if you don’t need that money in the next 3–5 years. In the past few decades, the stock market has generated tremendous wealth for investors who have had the ability to look beyond short-term fluctuations and hold onto their investments in all sorts of conditions. But what if you need to liquidate your investment due to some emergency and the stock markets are at a low?
Real Estate, Gold and other alternative investments have their own peculiar problems. It is always extremely difficult to sell a house or land when you immediately need money, and things get worse when such deals get stuck because of approvals and paperwork. Gold is more of a wealth protector than wealth builder. In the past 5 years, gold has generated CAGR of 2.19%. On top of it, it is extremely difficult to manage physical gold.
Hence, the solution is All Weather Investing. One single smallcase consisting of Equity (stock market returns), Gold and Fixed Income (bank FD returns), built using low-cost ETFs
How is All Weather Investing built?
At smallcase, our goal is to offer investment products that are
- liquid — so you can invest & redeem your money instantaneously
- cost-efficient compared to alternatives
- greater value than can be found anywhere else
All Weather Investing fits all three conditions very well. Our objective was to develop a product that can be used by investors in all situations — whether markets are low or high. The product should generate equity-like returns in long term, but should significantly reduce fluctuations to provide a smooth wealth creation journey
After extensive research, we built an algorithm to intelligently allocate your money into equities, gold and fixed income. We have tested the algorithm in all sorts of market scenarios, including the 2008 stock market crash, to check the performance of the strategy over more than a decade. And we can very proudly say that we have come up with a solution that generates higher returns at lower risks
Every quarter, our research team runs the algorithm to decide the optimal allocation — how much money should go into equities, gold and fixed income, and you will be able to apply the allocation with just 2 clicks!
Let the machines do the hard work of ensuring your money is in the right place at the right time.
Higher returns at lower risks
The strategy aims to provide stable and high long-term returns. In the following table you can see how the strategy protects your investments when markets fall.
|Period||Nifty||All Weather Investing smallcase|
|1 Jan 2008 to 31 Oct 2008||-53%||-18%|
|28 Oct 2010 to 30 Dec 2011||-23%||1%|
|27 Feb 2015 to 26 Feb 2016||-21%||-3%|
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