Dear Investors,
Elections are finally behind us, and we have a new government at the Centre with a clear mandate. While on the one hand markets welcomed this news, on the other markets were disappointed by the rather lackluster GDP growth and poor employment numbers.
GDP for FY19 at 6.8% was the lowest seen in five years, bringing up concerns of slowing economic growth. The RBI played its part in addressing this concern by cutting the repo rate by 25 bps to 5.75, the lowest since July 2010. It also changed its stance to “accommodative” indicating a willingness to bolster demand and encourage investment activity to boost economic growth. These events helped improve market sentiments, as did the onset of monsoons in certain pockets of the country.
This push-and-pull between positive and negative news flows creates volatility in the market and the best way to deal with such volatility is to sit tight with your equity investments. Market and economic recovery move in cycles, where highs will be followed by lows. These highs and lows last for a short period of time, but over the long-term present growth opportunities for investors.
There is no right or wrong time in the equity market, all you need to do is spend time in the market. The longer you stay invested, the better it is for you. However, when it comes to choosing the right equity investments, there are a few things you need to evaluate first.
To begin with, identify the goal for which you are investing and what is the time period of that goal. Then analyse what your risk appetite is, that is your ability to take risks on the investment you make. And last but not the least, choose the right investment plan that suits your goals and risk profile.
What follows is that mutual fund investments are not just about being invested but about making the right investments. Every individual’s investment planning solutions are unique and the first step towards sound investment planning begins with identifying the right solution.
This is where equity mutual funds come into play. They offer products that suit different investor risk appetite and needs, and offer benefits of diversification and ease of transaction.
So, ignore the short-term news flows which only serve to distract you from your goals. Stay focused on the larger picture and choose equity mutual funds for long-term wealth-creation.
Happy Investing!
Warm regards,
Ashwani Bhatia
Managing Director & CEO
