In 2007 many people had a lot of funds in equities….in 2013 Indians do not have too much money in equities. So to that extent 2013 does not look like 2007!

When will the retail Indians come to the equity market?

Difficult to say. The retail investor is scared of the equity markets (not understanding, volatility, frauds) and is happy in bank deposits. In case he has Rs. 20L his friends and relatives suggest a ‘house’ to be bought in ULWE or some such place.

However if YOU have a lot of money in the share market, real estate, or gold, check your asset allocation. It is always a nice time to rebalance. Rebalancing amongst assets – and intra assets. If the quality of equity shares you hold is not good, this maybe a good time to do internal equity rebalancing too. If you noticed a couple of months ago I had mentioned that I moved out completely from Hero Motors to Bajaj Auto.

So first see your asset allocation: have you gone over weight on real estate, gold, equity, debt or cash? Then reallocate to a ratio that you are happy with. Remember a good year can be followed by a good year, bad year or a great year. One year return on gold has been bad, but equities has been good. This may not be a bad time to increase your exposure to longer term debt – like Gilt- provided of course you have stomach for volatility.

So if you were in the markets in 2007 remember how that feeling in 2008 was. Sure 2009 was a great year, but surely in 2008 you felt ‘OMG why did I not book profits’ – right?

So do not make the same mistake. The immediately preceeding year is not an indicator of what is going to happen…if you have an exposure to a lot of Indian equity, look at US equities (believe me it has had a crazy run up too!) …but rechecking your total portfolio is a good habit. Also remember in 2007 you (me too!) were 6 years younger. So if you are 40 now, you may want to be more in debt.

One of the biggest assets that you have is the present value of your future cash flows – the remaining working life. See if you need to invest in YOURSELF. See if your term insurance is enough – or if your children have started earning, throwing away your term insurance …..

See, consider and act.