With the general elections underway, the Indian market has been very volatile in the last one month. The market’s reaction is marked by a blend of nervousness and fatigue.
While the market has already factored in a Modi win, a key concern remains weak voter turnout. Experts believe that in the next couple of months the market will likely remain volatile.
We are expecting Nifty to continue this momentum hopefully on following reasons below:
1.Stable govt elected,
2. Good corporate earnings,
3. Interest rate reduction after 2 quarters,
4.Higher capex spending and
6.Higher FDI flows in large cap companies.
After some point of time, there will be retracement which will take the nifty down to 21000 levels that is expected.
So your strategy should be as below:
- Don’t invest lumpsum ..spread the investment across 12 months
- Don’t let your SIP in mutual funds stop . Potential is much higher for CAGR growth.
- Focus on large caps especially BFSI , Infra , Metals and CPSE companies. FII will enter via large cap companies.
- Be cautious on small and mid cap segment ; there may be a correction in these companies
- Don’t get scared if there is a retracement of 5–10% from current levels(that’s how market functions)
- Asset Rebalancing is required now to maintain some level of diversification and asset allocation %
- Expect debt funds to move up with yields moving down and bond prices climbing. (look at corporate and medium term bonds)
- Follow 50/30/20 – Large cap/Mid cap/Small cap asset allocation strategy.
Robins Joseph , SEBI Regd: Investment Adviser , Certified Financial Planner. Founder of MyGuide2Wealth based in Noida specializing in wealth, investment, retirement services with clear aim of Spreading financial literacy and advocating on India’s strong equity story.
Disclaimer: The investment advice provided by the author is for informational purposes only. We take no responsibility for any losses or damages resulting from the use of this information.
