Increase investment in equity gradually, manage your investment portfolio in these four ways
Chances of stock market recovery: Increase investment in equity gradually, and manage your investment portfolio in these four ways
In the US, Silicon Valley Bank and Signature Bank were suddenly closed. The financial condition of First Republic Bank is also not good. On the other hand, Switzerland's investment banking company Credit Suisse is facing a weak financial condition. The effect of these developments was seen in the stock markets around the world. Indian investors are also in a dilemma as to what kind of strategy to adopt.
Due to the upheaval in the US banking system, the US central bank Federal Reserve may stop raising interest rates. If this happens, the fall in the equity market may stop. The boom may also return. In such a situation, investors from all over the world will again turn to the stock market. A part of it should come to markets like India. Still, this is a time of caution. A lot of volatility can be seen in the market right now. Rishabh Parakh, Chief Play Officer, NRP Capitals explains what to do in such a situation:-
1. Take advantage of declining stock prices - see the percentage of your equity portfolio in your total investments. If it is less than 20% or 30% then there is nothing to worry about. In such a situation, you should buy good shares gradually in 6-12 months, taking advantage of the reduced price. You can also increase investment in equity mutual funds.
2. Invest in real estate, and gold as well - Apart from equity, there should be other asset classes in the portfolio. These include real estate, PPF, bank deposits, gold and debt (such as bonds). If so, then all you have to do is buy new shares instead of those shares which have not been giving good returns for a long time.
3. Ignore the two-year performance - Since June 1999, never before has an investment of 5 years or more in Nifty-50 made a loss. Investing in Nifty stocks for 10 years has given more than 15% returns on 60% of occasions. So ignore the two-year underperformance of the equity portfolio.
4. Don't Panic, Continue SIP- For SIP (Systematic Investment Plan) market fall is beneficial. So continue SIP in a falling market. This decline will not last forever. The country's growth rate is expected to be the highest in the world in the next decade and a half. Its effect will also be seen on the market.