We have had a terrible time in the markets. It is true that the current environment remains challenging due to macro-economic headwinds. Over the past many years , financial markets have gone through multiple phases of ‘risk-on’ and ‘risk-off’ environment.
(1).Be your own judge: Develop a philosophy. Take your time, understand the product and, then, proceed. And, once you take the decision, be prepared to change course. “Be fearful when others are greedy, and be greedy when others are fearful”. Following the principle, falling markets gives an opportunity to invest in lower NAVs of promising funds.
(2).Trust the expert: Seek advice of a Financial Planner for better choice of funds. It helps you in creating road map for reaching your goals. This will help you in identifying, quantifying the current financial needs and how you can achieve these goals in a disciplined manner.
(3).A Patient & Disciplined investment approach: Investors might see gains in the short term, but loose in the long term due to lack of disciplined investment. Hence it’s always prudent to have a disciplined investment approach with a long term investment in mind.
(4).Diversify your investment: Diversify all your investments in various assets. Scatter your money or spread your investment portfolio over a wide range of different assets like Equity, Debt, Gold, Real Estate, NCD, PPF, Life Insurance…etc. and reduce the risk of returns. It acts like shock absorber on a car – it smoothens out the ride on a bumpy financial road.
(5).Don’t panic: Don’t panic or don’t be disappointed in the current market fall. Volatility is in the nature of the market. Don’t worry it is the nature of stock markets to move up and down, Understand volatility for better returns; this trade-off is a good one for long term investors. Stay away from the crowd.
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