How to Invest in volatile market?


The last one month may have been scary for many investors especially those who are facing a full blown bear market for the first time. In the last one month, Nifty 50 has fallen 32% and is trading below 8000. The last time we saw Nifty below 8000 was back in 2017. We are not alone in this situation. The rapid spread of Coronavirus around the world has badly affected market sentiments. Most of the major stock indices including Dow Jones, S&P 500, Nikkei, FTSE, DAX, etc have fallen nearly 20% by more than 30%.

Equity as an asset class is intrinsically volatile. However, there are periods where investors can face extreme volatility which can test their patience. We are going through such a period now and we do not know how long it will last. However, investors should understand the difference between risk and volatility.

  • You are likely to make a loss in this market if you redeem but if you remain invested, for a long period of time and follow a market will eventually recover and you can get good returns.
  • Systematic investing is likely to help you benefit from volatility.
  • You should be patient, continue your SIPs and take advantage of STP if you have lump sum funds.
  • Most importantly, you should avoid being affected by rumours and remain focused on your financial goals.
  • The age old virtues of patience and discipline taught by your parents will be your biggest friends in difficult times.

An Investor Education and Awareness Initiative by Mirae Asset Mutual Fund.
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Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

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