MUMBAI: Are you investing in the market regularly in a disciplined manner to achieve your financial goals? If so, there is no reason for you to panic and start liquidating part or all of your portfolio amid stock meltdown. That’s the suggestion from top fund managers and financial advisors for investors in India.
Over the past three decades, the Indian market has gone through several bouts of sharp selling, some influenced by external factors while others by local issues.Yet, over the last 30 years, the sensex has moved up by nearly 22.5 times with a compounded annual growth rate of 11 per cent. In the intervening period, the markets have seen the South Asian crisis, the dot-com bubble that burst, the sub-prime issues-led global financial crisis and the pandemic-led global selloff.
The current selloff is on the back of a three-year high unemployment rate in the US, the sudden strengthening of the Japanese yen leading to losses in the forex speculators and geopolitical crisis in West Asia.
“Long term investors should not be deterred by such global uncertainties. Market downturns should be viewed as an opportunity and the focus should be on a broader investment horizon,” said A Balasubramanian, MD & CEO, Aditya Birla Sun Life Mutual Fund. “The focus should remain on the broader investment horizon of 10-15 years, leveraging the solid fundamentals of the Indian economy and its companies.”
Despite a host of negative global economic fundamentals in the post-pandemic years, the Indian economy has shown strong resilience. The strength of the Indian economy should see Indian investors through the current crisis too, fund managers said.
“While possibility of a US recession is bad for equity market sentiment in general, and will lead to corrections across equities across the global markets, the markets where the domestic economy is stronger can be expected to rebound faster than others,” said Sandeep Bagla, CEO, Trust MF. “The Indian economy is likely to be more resilient than other smaller economies and hence investors could look to add to market corrections.”
Fund managers said that investing through the systematic investment route is the best for long term investors. “Long-term investments should continue, especially through SIPs, to build a resilient portfolio,” Balasubramanian said. However, there’s a word of caution from the fund managers as well: They should not expect very high returns, something that the markets have given in the recent past.
Over the past three decades, the Indian market has gone through several bouts of sharp selling, some influenced by external factors while others by local issues.Yet, over the last 30 years, the sensex has moved up by nearly 22.5 times with a compounded annual growth rate of 11 per cent. In the intervening period, the markets have seen the South Asian crisis, the dot-com bubble that burst, the sub-prime issues-led global financial crisis and the pandemic-led global selloff.
The current selloff is on the back of a three-year high unemployment rate in the US, the sudden strengthening of the Japanese yen leading to losses in the forex speculators and geopolitical crisis in West Asia.
“Long term investors should not be deterred by such global uncertainties. Market downturns should be viewed as an opportunity and the focus should be on a broader investment horizon,” said A Balasubramanian, MD & CEO, Aditya Birla Sun Life Mutual Fund. “The focus should remain on the broader investment horizon of 10-15 years, leveraging the solid fundamentals of the Indian economy and its companies.”
Despite a host of negative global economic fundamentals in the post-pandemic years, the Indian economy has shown strong resilience. The strength of the Indian economy should see Indian investors through the current crisis too, fund managers said.
“While possibility of a US recession is bad for equity market sentiment in general, and will lead to corrections across equities across the global markets, the markets where the domestic economy is stronger can be expected to rebound faster than others,” said Sandeep Bagla, CEO, Trust MF. “The Indian economy is likely to be more resilient than other smaller economies and hence investors could look to add to market corrections.”
Fund managers said that investing through the systematic investment route is the best for long term investors. “Long-term investments should continue, especially through SIPs, to build a resilient portfolio,” Balasubramanian said. However, there’s a word of caution from the fund managers as well: They should not expect very high returns, something that the markets have given in the recent past.
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