s it safe to invest in such high market?
The current buzz and conversation among people who are invested in equity markets are all about how the market is reaching new highs and of a potential downfall which is expected. “Should investments be continued or should one book profits and leave before a fall?” is a question most investors ask.
Just like life is made up of ups & down, markets too are cyclical in nature. One can neverpredict when the cycle will change.Eventually, in between these cycles, the ones who stay invested tend to buy at various points which can be high or low & this will average out any volatility in the long run. This is important for one to achieve their goals without being worried about the current high valuation scenario.
So is it really safe to invest in the current market scenario? Well yes, you may continue your investments in the current scenario. Acting rationally in such times will help you rule out any volatility. The following points will help you understand this better –
- Sticking by your Asset Allocation:
It is important that every individual must have their asset allocation as per their long-term goals (Also known as Strategic Asset Allocation) and stick to it despite market behavior. Investors tend to withdraw in volatile markets assuming the markets may fall or in the fear of incurring losses which may always not happen. Your advisor would have already anticipated the market fluctuations & prepared your Strategic Asset Allocation, so think of your long-term goals and act accordingly. - Invest in a staggered manner:
SIP which is a Systematic Investment plan and STP which is a Systematic Transfer plan are 2 ways in which one can invest in a staggered manner. This way you can buy units/shares at a different price – be it high or low, and ultimately your investments will average out. We don’t know when the markets will go up or move down, but SIPs and STPs will naturally capture the movements, thus helping you in reducing any risk associated with market volatility. - Do not try to time the market:
What is timing the market one may ask? It is the investment strategy that works on the principle of predictions. It can be said as an attempt by investors to sync their purchases and sale based on predictions to cushion any blows that the market fluctuations may include. Timing the market is difficult, in fact sometimes even experienced managers fail to do so. One never knows when the markets will rise or fall. So what is a better option you may ask? It is to stick by your allocation and go through a staggered manner, and be at peace about your investments rather than being constantly worried about market fluctuations. - Trust your advisor:
The saying “The only certain thing in life is uncertainty” stands true not only for life but also when it comes to investing in equity markets. It is always better to not go against the tide and stop investing just because of some volatility. We, at Right Value Services, are working to hedge any downside risk on our client’s portfolio. Even in the past, when the markets had a free fall, our client’s portfolio was largely anchored. We are always happy to talk to our clients and act as a torch-bearer in times of volatility.
In case you wish to discuss with us the current economy, market trends, and what assets
your portfolio should consist of in such times, feel free to connect with us.