Skip to main content

Just play it SAFE in turbulent stock market times

Most investors want to play safe in turbulent times, yet expect reasonable returns on investments. Below is the list of five themes to help you come out unscathed


DARE to bare your wisdom in the current market situation? You better shelve the idea if you have the faintest clue of the factors behind the negative sentiment. In fact, over the last six months, weak global market cues, skyrocketing commodity prices, particularly crude oil, high inflation, suspense over signing of the nuclear deal and political uncertainty have all cast a pall of gloom over the markets and made even the best laid-out investment plans go awry. And if you are a first time investor, this can’t be a more inappropriate time.


All, however, is not lost yet. Out five investment themes which may help you to beat the market blues over the next six months.


DEFENSIVE POSITIONING


No investor likes a range-bound, highly volatile market, marked by spikes and falls at regular intervals. And if you believe industry analysts, there is no let-off in the second half as well. They hold the view that bears and bulls will continue to punch each other to gain supremacy in the capital markets over the next six months, and losing the bout, probably, will be you — the investor. Thus, it is better to go for a defensive positioning. If you wish to dabble in the stock markets, then better buy defensive sector stocks — FMCG, pharma, healthcare and information technology.


You should opt for large-cap blue-chip liquid stocks, as in a tough macro economic environment, these stocks can withstand pressures. The focus should be to identify stocks in this space which are quoting at attractive valuations, without trying to time the market.


STAY WITH CASH


If you think you don’t belong to the first category, are cautious about your investments but still you want to get the best out of the equity markets, then you should better spend the next six months piling up cash. Over the near term, markets will remain volatile due to multiple factors such as policy responses to rising inflation ahead of national elections, absence of FII flows until the global scenario improves and earnings growth moderation. Further, growing strains amongst the ruling coalition pose additional uncertainty for the markets. In this scenario, analysts think it won’t be a bad idea to stay with cash, which you can accumulate to your advantage in the long-term, particularly till the market stabilises after the general elections.


CAPITAL PROTECTION


If the first two themes don’t excite you, and you are an investor who wants to enjoy the best of both equity and debt markets, then you should opt for structured products with capital protection. The advantage of investing in a capital protection product is that it allows participation in the stock markets without the accompanying worries of capital erosion. Typically, capital protection funds invest up to 20% in equity. Thus, not only your portfolio benefits from a reduced credit and interest rate risks, but also gains from the current high yields. In a nutshell, it acts as a hedge against a difficult market situation.


VALUE INVESTING


If you are an aggressive investor, then probably your investment outlook should be to do value picking in the stock markets. In the current market scenario, analysts believe that quality stocks across sectors will clock relatively good performance as investor focus returns to fundamentals. You should slip into the contrarian investing style, buying stocks that are currently trading below their net asset values. The recent volatility in the markets has thrown up attractive opportunities. Stock prices of various front liners at the current level seem to have already factored in lower growth prospects and look attractive.


Financial and engineering stocks are a good bet in the short-term, considering they have undergone sharp falls during the last few months. The banking sell off is overdone, and this sector remains a strong growth sector.


SYSTEMATIC ROUTE


Last but not the least, your investment theme should be one which includes a disciplined approach to investing. Markets are expected to be cyclical and in such a scenario, analysts recommend that either you can reduce the risk of equities by increasing your holding period or invest regularly through systematic investment plans (SIPs). It is advisable to avoid momentum and concentrated bets in a range bound market. The advantage with systematic plans is that it helps to average out your investments to the ups and downs of the equity market.

Popular posts from this blog

ICICI Pru Mutual Fund Dividend

ICICI Prudential Mutual Fund has announced dividend under the following schemes: Scheme Dividend ( Rs /unit) ICICI Pru Capital Protection Oriented Ser V Plan B-D 0.03611325 ICICI Pru Capital Protection Oriented Ser V Plan B Direct-D 0.03611325 ICICI Pru Balanced Advantage Direct-DM 0.06 The record date has been fixed as February 08, 2017. ------------------------------ ------ Invest Rs 1,50,000 and Save Tax upto Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds Top 4 Tax Saver Mutual Funds for 2017 - 2018 Best 4 ELSS Mutual Funds to invest in India for 2017 1. DSP BlackRock Tax Saver Fund 2. Invesco India Tax Plan 3. Tata India Tax Savings Fund 4. BNP Paribas Long Term Equity Fund Invest in Best Performing 2017 Tax Saver Mutual Funds Online Invest Best Tax Saver Mutual Funds Online Download Top Tax Saver Mutual Funds  Application Forms For further information contact  SaveTaxGetRich on 94 8300 8300 ------------------------------ ------ Leave y...

What is Financial Freedom?

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India)     There were many things common between our Freedom fighters. All had the Single vision (Free India), common goal (independence) and had a disciplined and focused approach. They were ready to do anything and everything and had made so many sacrifices to see India free . But the road to freedom was not easy .They had faced lot many hardships, went to jail so many times and even confronted physical and mental torture from the British. There was one more thing which proved to be an advantage to our fighters that most of them were professional lawyers. The knowledge of legal issues and its impact on our country at large has helped them counter various bills and proposed new laws by the then government. It is due to their continuous effort that we are able to achieve the goal of Independent Indi...

Hidden Bank Fees

  What Banks Hide From Customers Imagine after a peaceful and exciting holiday you receive your bank statement with steep charges. You then rush to your bank and start confronting staff members and to your dismay, you come to know that the high end debit card was charged very heavily. Wouldn't this cause damage to your finances? So remember, the world outside is full of deceptive and double cheating people. Unethical practices are always used by company sales person in order to meet the target. Credit card companies, mutual funds and bank institutions always play dirty tricks to lure customers and the practices are rampant. So here's how you should be careful while dealing with your banks: High End Debit Card Charges While opening an account with a bank you opt for a debit card with minimal charges. But later on when you upgrade your card and opt for high end debit card the annual charge rise by a good amount. Though such a card has slew of features but it all comes at a high ...

Partial withdrawal from PPF

  Public Provident Fund (PPF) account has a lock in period   If you opened a PPF account to meet your retirement needs,, think twice about withdrawing from this fund before retirement. But provided it's an emergency here are the rules. Public Provident Fund (PPF) account has a lock in period before which you cannot withdraw your money.   The partial withdrawal is allowed after the completion of 6 financial years . This means that you will be allowed a partial withdrawal from 1 April 2017. The maximum partial withdrawal allowed is the least of the following: 50 percent of the account balance at the end of fourth financial year, 31 March 15 50 percent of the account balance of the end of previous financial year, 31 March 17.   There's a loan option available on your PPF account between the fourth and the sixth financial year. You can obtain a loan of up to 25 per cent of the balance in your account. However, this will attract interest of 2 percent more than the prevailing ...

Updating a minor PAN card upon becoming adults

  Updating a minor's PAN card once they become adults A PAN card issued in the name of a minor does not contain the minor's photograph or signature, and therefore, cannot be used as a valid proof of identity. Once a minor PAN card holder turns 18, the relevant changes must be made in the PAN records. A new card is then issued bearing a photograph and signature. Application The applicant is required to fill up the "Request for new PAN card andor changes or correction in PAN data" form. The form can be filled up online by accessing NSDL's Tax Information Network website and clicking on the online PAN application tab. Information The applicant must mention the existing PAN number in the application and check the `photo mismatch' and `signature mismatch' boxes, and submit the online form. The form must also be printed out, signed by the applicant, and submitted along with two photographs. Documents Identity and address proof in the form of a copy of the app...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now