Hyderabad: Something or the other will impact stock markets from time to time. In the past three years, we have seen the Corona epidemic, the Russia-Ukraine war and the Adani crash. So, fluctuations are natural and you should prepare to survive any weather. A steady approach should be there when the indices are rising. A hasty withdrawal of investments is not advisable. Aim at achieving the expected profits.
Indices have risen over the past few years and hit lifetime highs. The value of your equity investments might have gone up by 5-10 percent. Currently, there is uncertainty in the markets. This may be the right time to adjust your investments. Keep investing in well-performing companies and funds. You should try to bring equity investments to a desirable standard.
When to withdraw
The stock market sees many ups and downs — recession, epidemics, wars, political upheavals. Volatility should not be a reason to withdraw investments. Despite temporary losses, it is poised to regain in the long run. Hence, overcome worries and invest, experts say. While deciding to invest, one should clearly think that '10-20 percent correction is possible annually. Then there will be no problem. Investments should be withdrawn only if you achieve your goal or have some other compelling reason. Remember that losses are not permanent.
What to lose
Shares of all companies do not fall at the same rate. Some stocks yield profits even when the market is falling. Always keep in mind that stocks with high debt and low prices should be avoided. Get rid of them immediately. Companies that are technologically advanced and have strong balance sheets should be looked at.
Also Read: IT department's new Tax Calculator helps find out your applicable tax
Why diversity
Care should be taken to keep your investments in low-risk and safe schemes. Your money should be in diversified investments like VPF, gold, bonds, and bank fixed deposits. We will be financially strong only when we have the right mix of investments based on future goals. Our financial plans should absorb any kind of unforeseen risk.
Why avoid trading
Statistics show that those who are making new investments in the stock market are also conducting trading transactions. Recent reports make it clear that more than 85 percent of this is being lost. Trading is very risky when the markets are uncertain. Even a small mistake in the stock market can ruin your plan.
Trading is not suitable for someone who cannot make quick decisions. Especially in the current situation. Many are seen on social platforms touting their achievements. It is never a good idea to pick a stock based on these. These can provide a 'tip' or two of profit when the market is good. As uncertainty continues these things become negative.
Why SIPs
One can opt for systematic investment plans (SIPs) to invest regularly every month. It is possible to invest in these with a small amount of money instead of a large amount at once. It helps to average out the market fluctuations.
