Gone are the days when investing meant spending precious time choosing the stocks to invest in. An investor now has access to modern tools of investing in the market, which does not require painstakingly long analysis or trial and error, risking capital. A lot of this has been possible due to Smallcases.
What is a Smallcase?
A Smallcase is a basket of carefully picked stocks that is based on an investment idea or a particular sector. To put it simply, these smallcases are a collection of stocks that seasoned professionals have picked to ensure that they give you the best return.
But do Smallcases help meet short-term goals?
Like with stock investments, Smallcases work the best over the long term where the fund manager gets the time in the market to capture as much of the returns as possible. Over time, the Nifty (read: the stock market) tends to trend upward, thereby taking your capital investment up too. This is the basic premise for all investments, including Smallcases.
They work by compounding your returns - that is, earning interest on interest. The returns from your first investment are added to your next investment (installment, should you set up a SIP) to become the principal investment that earns returns, and so on and so forth. Learn how to assess Smallcases using CAGR in our article CAGR performances in Smallcases - explained .
That said, Smallcases offer higher diversification, flexibility in the entry as well as in redemption, as and when the investor chooses. This makes them a good alternative for short-term gains too.
Investing in Smallcase for short-term gains
One of the best ways to clock high returns in the short term is via investing in small-cap or mid-cap stocks. Of course, they come laden with the highest levels of risk, which is what makes them potential winners too - the higher the risk, the higher is your potential reward. So should you have a suitable risk appetite and you aim to generate maximum returns by investing in small-cap stocks, picking and choosing a few of them out of hundreds of peers can seem like a daunting task?
Thankfully, Smallcases solve this problem with their carefully curated bunch of stocks that you can invest in. With a Smallcase curated with a perfect blend of small-cap and mid-cap stocks, you can rest assured of getting the best returns on your investment. All this without the hassle of having to hunt for stocks and analyze their metrics to find the best fit for you. The liquidity that the segment presents gives you the opportunity to exit when you need to, even though most investments perform the best over the longer term.
That said, choosing the best Smallcase with small-cap stocks for the short-term returns is highly subjective and depends on several key factors like your investment horizon, investment goal risk appetite, and capital that you can spare for investing in a Smallcase. Here are a few things to consider that can help you choose the best Smallcase for the short term.
1. Investment goal
Make sure that you set a realistic expectation of your end investment goal. Your investment goal must align with the capital you are investing in and the kind of Smallcase you opt for. Ideally, you can go for a well-performing Smallcase to help you achieve goals like buying a car, a 2-wheeler, saving for a vacation, or for purchasing another asset, among other things. Even as you pick Smallcases for investment suitable to your investment horizon, you must never lose sight of your investment goal.
2. Investment tenure
If you want to invest for the short-term, you are probably looking for smallcases that give high returns in under one year. While most smallcases, like Teji Mandi’s Multiplier, a concentrated portfolio of small-cap and mid-cap stocks, are targeted at wealth creation over the long term, they may be good picks for short-term gains too, as explained earlier.
Teji Mandi’s Multiplier has given a return of a whopping 88% in the last ten months to December 2021. So if you have a similar short-term investment horizon, taking a look at Teji Mandi’s Multiplier Smallcase might just be a good decision you make. Nonetheless, bear in mind always that stock investments perform the best over the long term.
Another popular Smallcase managed by Teji Mandi is the Teji Mandi Flagship, which has generated nearly 69% over 2021. This smallcase includes 15-20 stocks, all from a vast range of different sectors. Like the Multiplier, Teji Mandi’s Flagship is another smallcase that is aimed at generating profits along with making tactical investments for the long-term. Hence, these Smallcases give you the best of returns for the long-term, while they also may have the potential to deliver short-term gains. This is a unique advantage of smallcases where you can invest in many stocks that have been picked after the choicest consideration of both the long-term and the short-term goals.
3. Risk profile
Small-cap stocks that dominate a Smallcase crafted for the short-term have high volatility. The risk with such stocks is higher when compared to their peers. However, not all risk is bad since high risk and high return go hand-in-hand. You need to make sure that you have a high-risk appetite to brace the temporary dips in the market since equities are highly dynamic. Assess your risk profile to choose the best Smallcase for the short term.
4. Capital infusion
Most smallcases have a minimum investment bracket while there is no bar on the maximum amount you can use to invest in a particular smallcase. However, you need to allocate a fixed amount to high-risk smallcases. Regular investments in well-managed smallcases like the TejiMandi Flagship may help you achieve your financial goals and even meet near-time fund requirements.
Investing in the stock market via Smallcases is one of the best ways to reduce the stres s and burden of having to do it all by yourself for the short term which is fraught with risks such as market volatility as well as price fluctuations. This burden reduces significantly when you have a SEBI-registered investment advisor that has a successful track record, stellar experience, and is governed by market veterans overseeing your funds. All of these tied together by the magic of smallcase makes Teji Mandi a safe, reliable, and trustworthy option to choose when you are thinking about generating wealth in the short term.
Teji Mandi is a SEBI-registered investment advisor that helps investors make the right financial decisions to power their dreams. The company is a subsidiary of investment behemoth Motilal Oswal Financial Services, with ace investor Raamdeo Agrawal - a Director on the Board.