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The Mark Twain effect refers to the pattern of stock returns being lower in October compared to the rest of the year The term comes from a line in Mark Twain's novel October This is one of the peculiarly dangerous months to speculate in stocks The others are July January September April November May March June December August and February While there is a ring of humar it also highlights a serious aspect of investing which is Never Speculate Do not try to time the market Missing just 30 best days can wipe out entire returns over 15 years Out of 32 years while markets always had an interim correction only in 9 years did the market end the year with negative returns In other words for 23 out of 32 years the markets ended in positive despite the temporary decline in between 10 to 20 percent Temporary drawdown is almost a given every year Despite the NIFTY moving up from its lows in June 22 the valuation indicator has not moved in line because earnings growth has improved It is possible that the growth trend of G D P can be very different from the growth trend of stock market because composition of G D P and stock market are very different to each other For reference Number one Financial services constitutes 31 percent in NIFTY 500 but it only constitutes 6 percent in the G D P Number two Real estate and professional services constitutes 15 percent in the GDP but there hardly any weight in the equity Index Number three Similar is the case with Trade hotel and restaurants Even if the economy shows any sign of slowing down it is not representative of the equity market The levers for the next capex cycle are in the place with industry aggregate capacity utilization rising from 68 percent a year ago to currently around 75 percent Credit growth is at a multi year high of 16 percent and expected to inch up steadily A revitalised real estate sector is likely to provide benefits for the various allied sectors Earnings growth for the second half of the Financial Year 23 is expected to be much better than the first half For incremental investments we continue to suggest 50 percent deployment immediately and 50 percent to be staggered over 3 to 6 months while being able to accelerate deployment during sharp corrections We continue to maintain bias towards Multi cap and select Mid and Small cap strategies across M F or P M S or A I F platforms In the Fixed Income market yields have increased across maturities and are higher than pre covid levels Yield curve has become flat with short term yields rising more than long term yields Core Part of the fixed income portfolio can be locked in at higher accruals without taking high interest rate risk or credit risk Hence for Fixed Income portfolios we suggest core allocation to 4 to 5 year maturity segment through high credit quality target maturity debt funds which invest in a combination of G sec State Development Loans S D L and Triple A rated instruments Tactical allocation to select high yield strategies M L D s REITs InvITs can help enhance the yield on fixed income portfolios Different asset classes exhibit low correlation to each other in the long term Delphi As soon as posible is an all weather strategy that benefits from asset class diversification and yearly rebalancing It is positioned as a superior alternative to fixed income