Markets worldwide are volatile. So, what should you do?
Here’s what 5 leading money-verse personalities think.
We recently co-hosted a Round Table with Ladies Who Lead at The Quorum, Mumbai. Senior leaders from financial services shared their thoughts on how to stay invested when markets are volatile.
The discussion included:
So if you’re looking over your shoulder wondering if your portfolio will “survive” or wondering if this is indeed the right time to buy or sell, here are a few key takeaways that experts believe you should be thinking about.
Know your portfolio
First and foremost, it is imperative to know and review your portfolio.
Deena Mehta cited research that suggests up to 50% growth in wealth can happen merely from regular portfolio reviews. She made an interesting contrast between how much effort people take to keep physical assets safely vs. financial assets.
The other key aspect to bear in mind is asset allocation. The sectoral deployment of your portfolio may not be so important when your portfolio is small. But, as it grows, paying attention to how much you've invested in certain types of assets or currencies is key.
Ironically, we spend 90% of our time in stock selection and very little on asset allocation.?
Old is gold
Sumita Pillai talked about the important role that Mutual Funds play in the investing journey of people who do not want to or have no inclination to enter markets to directly buy stocks and bonds.
Amisha Vora emphasised the importance of compounding to illustrate that starting early and simply getting slow and safe returns over time will keep you in great financial health in the future.
So, even if you are in day-trading and are making profits, it is a good idea to take part of your profits and invest them for long-term compounding benefit. In fact, a major problem is that people sometimes trade like investors and invest like traders.
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Consciously make decisions on what part of your portfolio is for long-term growth vs. what part will bring you short term gains and needs to have stop-loss limits. This important for people that do both, trading and investing.
In addition, the panel talked about investing in gold bonds or digital gold as a measure of diversification.?
You haven’t missed the bus!
The highlight of the discussion was advice from Deena Mehta, "This is a market. You are here to buy!" Markets will go through volatility and there will always be something good that will be a good bet for future.
The panel also talked about the need for spending time to learn about companies you are investing in. Like Amisha said, “You are not buying the share, you are buying the company”.
And if that effort is too much, maybe just go for that index fund because few people beat the return on the indexes anyway.
Volatility in the market also means that sometimes, people feel like they had missed the bus on buying cheap, like when the market rallied post-COVID. With the current volatility in the market, it’s a great time to dip your toes again… but carefully.
Is it safe?
Panelists were unanimous in their opinion that now is the best time for people to learn and earn in markets. Shinjini highlighted that transparency in the world of investing has improved to a remarkable degree, aided by the availability of good quality information and learning material.
Yet, few investors actually take the opportunity to learn and this has a bearing on the decisions and the money they make.
Meghana pointed out that because the market does not require qualifications to enter, there is a tendency to jump in and sometimes not make the required effort to learn.
However, the positive side is that women especially can use the opportunity to access resources and take advantage of the flexibility that the profession of investing or even trading offers.
Powered by insights born of years of experience of navigating the markets, the discussion threw up loads of timeless wisdom from key financial leaders.
To get a first-hand experience of more such discussions in the future, follow SALT and Ladies Who Lead!