With euphoria running high, we spoke to financial advisors about ways investors can adjust their playbooks
Bulls are marching on. Indian markets are reaching new highs with both indices achieving fresh highs. Despite volatility ahead of elections, experts expect the momentum to continue through March with Nifty expected to reach 22,700 levels in March and 23,000 in April.
Ashish Gupta
According to Ashish Gupta, a stock broker operating out of Sector 36 Noida, India has been in a bull market for a very long time, crashes keep happening but the market has been growing consistently.
There are three ways the market behaves—bullish, bearish and flat. It depends on the time horizon. For instance, in January 2023, it was hovering around 18,000 and today it is 22,000, which means it has gone up by almost 25%, which is a classic Bull Run phase.
Robins Joseph
Robins Joseph who is a and Certified Financial Planners and Founder of MyGuide2Wealth, Noida Sector 63 said that the bull markets are characterised by extended period of rise in prices of securities, highlighting optimism, investor confidence, and expectations that strong results should continue for extended periods of time.
He said, “we expect short-term volatility to exist in the market while long-term India’s equity story is very positive”.
In times like these, financial advisers caution their clients not to let the fear of missing out (FOMO) impact their decision-making. They encourage them to diversify their holdings and stick to systematic investment plans—which is investing a fixed amount of money at regular intervals—because a common man may not be able to predict the market ups and downs.
Some tips for investing in a bull market
1. Diversification and Asset Allocation
One can’t profit from a bull market unless invested in stocks. So check your asset allocation.
According to Robins, have a diversified portfolio with 40-50% in equity allocation, 10-15% in gold preferably sovereign gold bond and the remaining to be part of debt portfolio.
2. Focus on growth stocks and sectors
Growth stocks and sectors appreciate faster than peers. Many growth stocks could be young, innovative companies that are using technologies to create efficiencies or solve global issues such as climate change.
According to Robins in equity, investors should prefer large caps over small caps and mid cap schemes.
3. Systematic Investment Plan
It is a strategy of investing on a set schedule and budget. An example would be investing a certain amount of money same day of the month. In early days, bull markets can be volatile.
In the systematic investment plan, asset rebalancing may be required to maintain some level of diversification and asset allocation.
4. Invest in debt funds
Investment in debt funds is a good strategy in a bullish market as yields are lowering and bond prices climbing.