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What to do in the current bleak market scenario?
- Often the best buying opportunities are when things still seem quite bleak, the current market situation could be one such opportunity.
- There is no dearth of investment options though. The current scenario is an opportunity to invest in Equity at a decent level. Though the market has corrected quite a bit in the recent times, the ‘India Growth Story’ still holds good.
- Investors should focus on parameters such as asset allocation, costs, tax efficiency, and the building of a diversified portfolio that minimizes, if not eliminate the possibility of idiosyncratic, uncompensated risks.
- In the last 20 years, market has gone through various crests and troughs (recessions and recoveries) but if someone would have ignored the noise and just remained invested till 2015, he/she would be sitting on a healthy return.
- Make sure not to stop your SIPs even though the market is on a downward spree. In fact, you get to accumulate more units when the market is down than when it is up. You only need to give these units enough time to grow.
- Due to the Market correction, most of the equity Mutual funds have performed below par but we believe that the true potential of Equity can only be assessed in a full economic cycle and at least for a time frame of 1 year to make any substantial change in portfolio.
- This is the best time to invest in Balanced funds as it has the perfect combination of both worlds
Equity and Debt. Check out the performance of balanced funds below:
Scheme Name 1. Birla SL Balanced ’95 Fund(G) 2. Canara Rob Balance Scheme-Reg(G) 3. HDFC Balanced Fund(G) 4. ICICI Pru Balanced Advantage Fund(G) 5. SBI Magnum Balanced Fund-Reg(G) 6. Tata Balanced Fund(G)Irrespective of the market situation, what’s important is that you should be investing early and regularly. Let’s see how this can benefit you:
Remember these:
- It is suggested to restrict your portfolio to 4-5 schemes.
- You can choose combination of Lump sum and SIP by making required adjustment in the portfolio.
- One can expect large short term fluctuations in the market performance and a very wide range of potential outcome in the long term. In most cases, and over the long term, Investments should yield desired results.
- It is assumed that you have made arrangement for short term needs and sufficiently covered for any contingency.
- It is more important to have time in the market rather than timing the market!!! Longer you stay invested, lesser would be your probability of loss.
SIP your way through this volatility
SIP is a perfect tool for people who have a specific future financial requirement. By investing an amount of your choice every month, you can plan and meet your long term financial goals such as funds for a child’s education, marriage in the family or a comfortable post-retirement life. Secondly, staying invested over longer term in the equities helps handle the fluctuation or volatility in equities.
Make sure not to stop your SIPs even though the market is on a downward spree. In fact, you get to accumulate more units when the market is down than when it is up. You only need to give these units enough time to grow. Following are the advantages of SIP:
- Investment in small amount
- Periodic
- Regular
- Helps accumulate wealth in a disciplined manner
- Rupee cost averaging
Financial Funda for You:
- Never break these two – Promises and SIPs
- Be certain about uncertainty – Always have at least 6 months worth expenses in a liquid fund
- Never hold all your eggs in one basket – Diversify your investments in various asset classes
- Magic may turn into tragic – Don’t be greedy in the markets. Invest as per set goals
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