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5 power-packed tips for investors to thrive in a falling market

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[hfe_template id='11223'] [ad_1] The broad-based stock market indices are down anywhere between 15–20% from their peaks reached in September 2024, while the small- and mid-cap indices have declined by up to 25%. The sweeping tariffs announced by the US last week have spooked markets globally, including the Indian market. Amid this declining trend, many equity mutual fund investors, especially those experiencing such volatility for the first time are likely to face a difficult question: what should they do with their equity mutual fund investments? While the exact answer may vary from investor to investor, here are five tips to help investors not just survive but thrive in a falling market. 1. Remind yourself that volatility is an inherent characteristic of equities One of the most important characteristics of equities is that they offer higher long-term return potential compared to most other asset classes, but with a higher risk or volatility. Generally, investors focus...

How embracing volatility is the path to wealth creation on Dalal Street

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[hfe_template id='11223'] [ad_1] In the wake of a prosperous CY2023, concerns about a potential market correction surfaced among investors, casting a shadow over CY2024. Overvaluation in some segments of the stocks added to investors’ worries. Some mutual fund houses decided to restrict the fund flows into schemes focusing on small-cap stocks, which in turn played on the investors’ sentiment. The proactive approach of the regulator by asking the mutual funds to carry out a stress test, which acts as a timely nudge. The Reserve Bank of India also stepped in with proactive intervention in non-banking finance companies and payment businesses. All these have served the investors by bringing down the valuation premium the small and mid-cap stocks enjoyed over the Nifty50 index. Volatility, an inherent element of the market, poses a dilemma for inexperienced investors. However, whether volatility serves as a risk or an opportunity depends on the mindset of the investor, partic...