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- Investing In Dead Sectors A Costly Mistake
29 May 2025 · Thursday
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Good evening, WeekendInvestor
Today’s Daily Byte
It was another day where there was no significant move as such. The market remained largely stable. From overseas, the news came in that the court has challenged Trump’s tariff policies. This brought some relief and triggered a mild rally across global markets.
As of now, there’s no major trigger expected. Any significant move will likely be based on the anticipated interest rate cuts in June or other major overseas developments.
Reading Time : 7 Minutes
Top Trending Strategies
Mi EverGreenThis 20 stock portfolio selects large and mid cap stocks from the CNX200 index. It also has a fixed 25% allocation to Gold ETF as a hedge. It is rebalanced monthly. | Mi 35This 35 stock - weekly rebalanced - rotational momentum portfolio is made up of the strongest stocks from the Smallcap 250 universe. |
Why Investing in Dead Sectors Can Be a Costly Mistake
From 2008 to 2020, the Real Estate index and Nifty exhibited very different trends. In 2008, the real estate index was rising quickly, appearing strong and active. However, it then experienced a sharp decline of approximately 70-80%, or even more.
After this drop, it remained flat for nearly a decade, with no significant movement in the real estate sector during that long period. In contrast, Nifty continued to grow steadily during those years.
Reading Time : 3 Minutes
The Momentum Podcast
This episode of THE MOMENTUM PODCAST features Manubhav, a third-generation real estate professional, sharing his unique journey navigating both worlds.
Discover:
✅ FROM PROPERTY TO PORTFOLIO: Manubhav's transition from his family's established real estate business to exploring equity investments.
✅ MARKET WISDOM: His candid experiences with market swings, including COVID-19's impact on his SIPs, and lessons learned from F&O and smallcase.
✅ THE BIG COMPARISON: A fascinating look at real estate vs. equity returns, featuring real-world numbers from his family's 40-year property investment.
✅ UNCOMMON INSIGHTS: Why gold is a family favorite and the surprising state of equity investing in smaller Indian towns.
What Small Cap Drawdowns Teach Us
The Nifty Smallcap 100 index reveals an interesting pattern over the past 20 years. From 2004 to 2024, data shows that small-cap stocks typically experience a significant drawdown, or decline, almost every year. The average drawdown during this period is around 26%, with most years witnessing double-digit declines. In fact, only one year had a drawdown below 10%. This indicates that it is common to see a 10–30% dip in small-cap stocks annually.
Reading Time : 3 Minutes
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