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Mumbai: Should long-term investors use extreme stock market volatility to place their bets? Or, should they sit this period. Investment advisers say that since market volatility and bearish sentiments don’t last forever, long-term players with excess funds should invest some of their money in quality stocks.
Financial planners also advise their clients not to invest their excess funds in stocks all at once, but to spread them over the next few months. Investors could also allocate a small portion to gold and silver, which are expected to outperform the yellow metal this year due to an expected increase in industrial demand from electric vehicle makers.
“If you plan to build wealth, invest for the long term, rather than fear headwinds, you should buy good stocks,” said Raghvendra Nath, MD, Ladderup Wealth Management. Investing in distressed assets is best in times of crisis, he said. Bad times don’t last forever. And once the tide turns, these assets typically outperform other assets, he said.
Problems arise when investors enter the market with a short-term approach. They hope to make quick money and in times of market volatility when they suffer losses they prefer to get out. This aggravates market volatility, experts said.
“Volatility doesn’t last forever. Given the current volatile situation across all asset classes, investing in stocks should be a preferred option rather than avoiding it,” Nath said.
So what should the investment approach be now? Financial advisers said a good route is to put 30-40% of the corpus in stocks and the balance 60-70% in cash or bank accounts. This money can be used to buy shares in 3 to 6 months, which will average the total purchase price of the shares.
Risk averse investors might keep some excess amount aside to invest in bonds and gold, silver, etc. short-term bond funds, then when prices fall, they could invest in long-term programs.
If an investor is looking to invest in precious metals, it is better to invest more money in silver than in gold, said Navneet Damani, SVP (commodities research), Motilal Oswal Financial Services. Given geopolitical tensions, rising inflation, rising crude prices and the lack of visibility on how these might be contained, precious metals are likely to rally, he said. he declares. However, “we expect silver to outperform gold this year,” Damani said.
Financial planners also advise their clients not to invest their excess funds in stocks all at once, but to spread them over the next few months. Investors could also allocate a small portion to gold and silver, which are expected to outperform the yellow metal this year due to an expected increase in industrial demand from electric vehicle makers.
“If you plan to build wealth, invest for the long term, rather than fear headwinds, you should buy good stocks,” said Raghvendra Nath, MD, Ladderup Wealth Management. Investing in distressed assets is best in times of crisis, he said. Bad times don’t last forever. And once the tide turns, these assets typically outperform other assets, he said.
Problems arise when investors enter the market with a short-term approach. They hope to make quick money and in times of market volatility when they suffer losses they prefer to get out. This aggravates market volatility, experts said.
“Volatility doesn’t last forever. Given the current volatile situation across all asset classes, investing in stocks should be a preferred option rather than avoiding it,” Nath said.
So what should the investment approach be now? Financial advisers said a good route is to put 30-40% of the corpus in stocks and the balance 60-70% in cash or bank accounts. This money can be used to buy shares in 3 to 6 months, which will average the total purchase price of the shares.
Risk averse investors might keep some excess amount aside to invest in bonds and gold, silver, etc. short-term bond funds, then when prices fall, they could invest in long-term programs.
If an investor is looking to invest in precious metals, it is better to invest more money in silver than in gold, said Navneet Damani, SVP (commodities research), Motilal Oswal Financial Services. Given geopolitical tensions, rising inflation, rising crude prices and the lack of visibility on how these might be contained, precious metals are likely to rally, he said. he declares. However, “we expect silver to outperform gold this year,” Damani said.
