For the third time in the last 15 years, bank fixed deposits were the best performing asset, outperforming equities, gold and property.
For the third time in the last 15 years, bank fixed deposits were the best performing asset, outperforming equities, gold and property. After returning 32% in 2014, equities were down 6.4% in 2015. At the beginning of last year, very few would have given fixed deposits even an outside chance of being the best performing asset for the year.
Moreover, of the three calendar years with negative equity returns in the last decade, 2015 has been the only one where in a falling market, mid cap stocks have outperformed the large caps. Last year sector selection did not matter much as compared to the last few years, inter-sectoral performance deviation was much lower. For an investor, however, the basic thinking should be individual stock. So, the importance of disciplined asset allocation for retail investors to maintain a balance between equities and fixed return instruments was reinforced.