That there has been a bloodbath would be overstating things. Only one question begs an answer: What should an investor do now?
First things first. In much the same way that markets go up, they also come down. Therefore, advises a senior fund manager, if you are a long-term investor and can remain invested for at least a year, don’t lose too much sleep. And there are a few good reasons why you ought not to.
The current bear phase, he explains , has nothing to do with the performance of Indian companies. It is, essentially, a function of the trouble in the US.
So long as these problems persist, markets across the world will remain jittery and stock price will remain low. Theoretically, therefore, it is a great opportunity for investors to reshuffle their portfolios.
How you do that, though, depends on what kind of an investor you are.
According to a market veteran, if you are a mutual fund investor, staying invested would be a good idea. That’s because fund managers are already churning their portfolios to contain losses.
When the recovery starts, their gains will be good. However, if you have invested in sector-specific funds, he advises you switch to diversified funds.
For instance, the decline in the values of certain sector-specific funds like pharma and FMCG is much higher than diversified funds that have invested in performing sectors.
First things first. In much the same way that markets go up, they also come down. Therefore, advises a senior fund manager, if you are a long-term investor and can remain invested for at least a year, don’t lose too much sleep. And there are a few good reasons why you ought not to.
The current bear phase, he explains , has nothing to do with the performance of Indian companies. It is, essentially, a function of the trouble in the US.
So long as these problems persist, markets across the world will remain jittery and stock price will remain low. Theoretically, therefore, it is a great opportunity for investors to reshuffle their portfolios.
How you do that, though, depends on what kind of an investor you are.
According to a market veteran, if you are a mutual fund investor, staying invested would be a good idea. That’s because fund managers are already churning their portfolios to contain losses.
When the recovery starts, their gains will be good. However, if you have invested in sector-specific funds, he advises you switch to diversified funds.
For instance, the decline in the values of certain sector-specific funds like pharma and FMCG is much higher than diversified funds that have invested in performing sectors.
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