As you can would have noticed the Indian Stock Markets are continuously falling since Budget (Feb 1st) day for various reasons
While the Large caps have not fallen much, there is HUGE Correction in MID & SMALL Cap stocks over the past few Months
While the Year to Date (from Jan 1st, 2018 till date) returns of Sensex & Nifty 50 are 4.2% & 2.6% respectively, over the same period the YTD returns for Midcap & Smallcap Indices are (-11.4%) & (-16.5%) respectively….
In fact these are average returns, some Midcap & Smallcap Stocks , of low Quality have fallen as much as 25 to 40% over this period….
There are various reasons for correction in the market
1. Continuous Selling by FIIs
2. MF recategorization
3. Rising Crude Prices
4. Rising interest Rates in US & now in India
4. Political Uncertainty in 🇮🇳 India
Now you can’t expect the Stock Markets to rise all the time
Especially if previous year was good
Again what is a Fall in Market ?
A Discount Sale & opportunity to BUY / INVEST
An SIP investor should rejoice this correction & should increase his SIPs till it hurts him /her …
Why am I saying so???
2018 was always going to be a year of Volatility; This is a Election Year with 4 State Elections & 1 Central Election…So there is Political uncertainty until May 2019 when Central Elections results will be out & we shall know which political party forms the Govt…
So, from now till 2019 May, it shall be a news driven market…at every positive /negative news the market shall over react…Hence VOLATILITY…
Now is there a way of benefitting out of this situation ?….There sure is …
Lets first understand What not to do over next 12-15 months?
- This is not a year to be ADVENTUROUS at all so Stay away from directly Investing in Stock Market
- Stay away from Midcaps & Smallcaps
- Don’t put Lumpsum Investments at one go in Equity Mutual funds
- Don’t Invest even in Mutual Funds without PROFESSIONAL ADVICE…
(it is in years like these that the Value add your ADVISOR brings on the table gets appreciated & his Advising Skills come to one’s rescue)
How to benefit from this Volatility ???
There are only 3 ways to tackle this Roller Coaster Ride in the Market
- Via SIPs
- Vis STPs
- Invest via Asset Allocation Funds or Hybrids
- Invest in Debt Mutual Funds
ASSET ALLOCATION Funds & SIP / STPs are the 2 terms that one should not forget this year
Anybody who follows this approach over next 15 months will benefit immensely from this Market Volatility & will stand to gain handsomely over next 3 Years…