Top fund managers explain how MF investors should tackle stock market volatility
Sensex on Friday tanked 588.59 points to stand at 46,285.77. And since January 21, the benchmark index has made a loss of 3,506.35 or 7.04%
Following this, the market capitalisation of BSE-listed companies has seen an erosion of ₹11,57,928.54 crore to ₹1,86,12,644.03 crore during this time.
As retail investors are in a state of panic, top AMC bosses suggest that there is nothing to panic, and advise them to focus on building a solid portfolio.
Addressing the most asked question to Mutual Fund bosses, Radhika Gupta, MD and CEO, Edelweissmf, said, it is a bad question: How much will markets fall?
Further, adding that the good question is how can I build a portfolio that is robust across market falls/cycles?
Building a portfolio with the right asset allocation is key to wealth creation. Different asset classes – equity, fixed income instruments, gold, real estate- play different roles in a portfolio. So, if MF and stocks bring growth potential over the long term, fixed income products bring stability. So the right kind of portfolio can reap the benefits when the markets are high and at the same time, it can cushion the market losses.
Aashish P Sommaiyaa, CEO, White Oak Capital Management, meanwhile, said this might well be the time to buy into the market for some investors. He said: There’s a lot of people who have been baffled by the unprecedented rally over the past few months. A 7-8% correction is not much but if it sustains given the good corporate and economic performance I’d expect fence-sitters to buy into the markets.
DSP Investment Managers President Kalpen Parekh said: 4000 points crash or 8% Price correction from 50000. 4000 looks big – but it’s still just 8%, pointing out, “And it can even get worse.” and the best way to stride this is through asset allocation.
The day after the market started hitting low, he took to Twitter to say: Yesterday I was sad I had only 60% in Equity funds. Today I m fine to know I have 40% in debt funds.
Stressing that one should never be bothered by market movements, he says in another tweet: Be a 2030 investor – not the one to worry about portfolio value at 20:30 every day.