Though the year 2008 has been quite tough on investors, the month of October proved to be a particularly harsh one. The stock markets fell sharply, largely on account of the deepening global financial crisis and fears of a lower economic growth.

The BSE Sensex shed 23.89% during the month and closed at 9,788 points; the S&P CNX Nifty posted a loss of 26.41% to close at 2,886 points. Investors in the midcap segment suffered the most; the S&P CNX Midcap dipped 28.30% before settling at 3,506 points.

As on October 31, 2008, Foreign Institutional Investors (FIIs) were net sellers of equities to the tune of Rs 142,486 m. On the contrary, mutual funds were net buyers with purchases of Rs 11,865 m.

Monthly top losers: Open-ended equity funds

Equity Funds	NAV (Rs)	1-Mth	6-Mth	1-Yr
JM Emerging Leaders	4.24	-46.22%	-70.50%	-73.65%
JM Contra	3.95	-45.92%	-65.20%	-65.90%
JM Small & Mid cap	4.02	-44.56%	-68.23%	-71.32%
JM Basic	9.83	-44.44%	-66.04%	-70.91%
Tauras Discovery Stock	9.00	-35.67%	-61.96%	-62.95%

(NAV data as on October 31, 2008.)

The month proved to be particularly bad for funds from JM Mutual Fund. Four funds from the fund house featured among the top five losers in the equity funds segment. JM Emerging Leaders (-46.22%) suffered the most, followed by JM Contra (-45.92%), JM Small and Mid Cap (-44.56%) and JM Basic (-44.44%).

Monthly top gainers: Long-term debt funds

Debt Funds	NAV (Rs)	1-Mth	6-Mth	1-Yr
DBS Chola Triple Ace	24.68	8.31%	4.15%	1.33%
DWS Premier Bond	13.30	4.02%	4.11%	5.41%
IDFC Dynamic Bond	15.87	2.19%	3.84%	10.33%
IDFC Super Saver	19.55	2.06%	3.42%	8.81%
UTI Bond Fund	24.02	1.92%	2.38%	4.59%

(NAV data as on October 31, 2008.)

DBS Chola Triple Ace (8.31%) occupied the top position in the long-term debt funds segment. DWS Premier Bond (4.02%) and IDFC Dynamic Bond (2.19%) also featured in the month’s top performers.

Monthly top losers: Balanced funds

Balanced Funds	NAV (Rs)	1-Mth	6-Mth	1-Yr
JM Balanced	13.75	-25.63%	-47.60%	-56.51%
HDFC Prudence	90.24	-20.92%	-32.83%	-40.45%
HDFC Balanced	25.61	-19.52%	-29.52%	-31.94%
Sundaram Balance	26.55	-19.10%	-32.83%	-40.55%
ICICI Pru. Balanced	25.30	-18.28%	-35.41%	-43.04%

(NAV data as on October 31, 2008.)

JM Balanced (-25.63%) fared the worst in the balanced funds segment. HDFC Prudence (-20.92%) and HDFC Balanced (-19.52%) occupied the second and third positions respectively.

Clearly, the uncertain investment scenario has unnerved several investors and panic seems to have become the order of the day. However, now is a good time to recall the age-old adage - every adversity brings with it a hidden opportunity. Notwithstanding the volatility being experienced in stock markets at present, investors would do well to understand that valuations based on long-term earnings potential look attractive. Some of the share prices are back to the June 2006 levels. Furthermore, the domestic economy can be expected to clock an annual growth rate of 6.5%, which is still 2x the global average.

In other words, for risk-taking investors with a long-term investment horizon (at least 3-5 years), this is a good time to get invested. Of course, it is imperative that investments be made in well-managed funds with a proven track record across parameters and over the long-term. Also, the funds should be right for the investor in question i.e. they should be equipped to help him achieve his pre-determined investment objectives. This in turn necessitates that investors engage the services of a competent investment advisor who can help them select the funds and manage their investment portfolios.

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