5 Things to do in a Volatile Market
1. Focus on long-term
It is normal to feel negative during period of volatility or downturn, however one should focus on the long-term wealth creation and stay invested.
2. Diversify
Diversifying your portfolio across different Asset class such as Equity, Debt, Gold etc is key to reduce volatility in your portfolio and smoothen your ride during a turbulent market.
3. Review & maintain strict Asset Allocation basis your long-term goals
Reviewing your Asset Allocation mix regularly and rebalancing it back to the target allocation is a prudent and ideal way of leveraging your investment portfolio to achieve your long-term goals
4. Avoid Noise
We are constantly exposed to diverse news and updates on different platforms which may not have any significant long-term impact on your portfolio. Not all information is useful and relevant.
5. Accumulate with SIP’s
Corrections in markets can be leveraged as an opportunity by starting or enhancing SIPs ( systematic investment plans ). In a market correction, SIP investors ends up buying more units thus averaging their overall buying price and helping optimize returns in the long run.
SIP Table
| SIP Amount | 5 Years* | 10 Years* | 15 Years* | 20 years* |
|---|---|---|---|---|
| 5,000 | 3,90,412 | 10,32,760 | 20,89,621 | 38,28,485 |
| 10,000 | 7,80,824 | 20,65,520 | 41,79,243 | 76,56,969 |
| 15,000 | 11,71,236 | 30,98,280 | 62,68,864 | 1,14,85,454 |
* Value of investment (In Rs Lakhs)
Rate of Return assumed at 10% CAGR (Compounded Annual Growth Rate) for illustration purpose only.
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully. The information provided is generic in nature and is for informational purpose only. Please consult your financial advisor before taking any decision.
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