The recent fall in the equity market has highlighted a different character of retail investors. Contrary to the earlier perception that retail investors are the last to join and the first to leave, this time they were clearly the first to join the party when their institutional counterparts were still sceptical. There were instances when retail investors were nimble enough to spot opportunities in the equity market, investing in a staggered manner. This behaviour reflects that a lot has changed in the last few years and that now retail investors are acting in a more mature manner, displaying discipline while taking investment decisions.
Once again when the market has taken off on an upward spiral and has risen by more than 40 per cent from its recent lows, investors have started to book profit. This has been reflected in the June 2020 mutual fund inflow numbers where redemptions have increased considerably from equity-dedicated funds. Making these tactical investment moves should be part of your entire investment strategy but this should not be your only investment strategy or rather a trading strategy. Nobody has ever consistently timed the market and benefited out of it. To fulfil your long-term investment needs you need to have a more disciplined approach.
Investment Process
The investment decision process for retail investors is well cut out and has been documented by professionals and academia. There is a five-step process that needs to be followed in a sequence.
1. Setting the long-term asset allocations, as for example, how much of your investment should go into bonds and how much should go into stock.
2. Establishing the investment policy and rebalancing the parameters.
Esta historia es de la edición July 20, 2020 de Dalal Street Investment Journal.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.
Ya eres suscriptor ? Conectar
Esta historia es de la edición July 20, 2020 de Dalal Street Investment Journal.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.
Ya eres suscriptor? Conectar
How To Invest In An Ageing Bull Market
Bull rallies (periods when stock prices rise) and bear declines (periods when stock prices fall) are natural parts of stock market cycles, but they don't follow a fixed timeline.
Should You Entrust All Your Money To A Single AMC?
If you are a market participant, you have probably heard the quote 'don't put all your eggs in one basket', which suggests diversification. Investors often focus on diversifying across categories like large-cap, mid-cap and small-cap, but they may unintentionally overlook diversification across different AMCs. The question arises: is AMC-wise diversification really necessary? Rakesh Deshmukh takes a closer look at this scenario
Wild Swings Engulf Global Equities
U.S. stock markets experienced significant volatility. An early-week rally pushed the markets to new highs, but this momentum faded, primarily due to weaknesses in the tech sector. The major indices had a mixed finish with, S&P 500 and Nasdaq closed lower, while the Dow recorded a notable gain.
U.S. Elections and China's Economy Hamper Commodities
Commodity markets experienced selling pressure in the last fortnight, driven by uncertainties surrounding the upcoming U.S. presidential elections, concerns about the Chinese economy, and increased agricultural production in Brazil.
Wealth Building For Retirement Through Mutual Funds
Retirement is one of the most crucial and lifechanging phases. It marks a period where maintaining your lifestyle becomes paramount even though your regular income stops.
Mastering Investment with Information Ratio
Information Ratio helps in navigating the complexities of the investment landscape by assessing an active fund manager's performance. And though it has its limitations, it remains an essential part of the finance industry. The article explains what Information Ratio is and how investors can use it as another tool
Plan To Be Financially Independent
Each of us aspires to be financially independent as it ensures having enough resources to be self-sufficient and control our finances.
❝Technology is the new game-changer"
With a new breed of young investors entering the financial markets, it is the use of technology that is increasingly playing a major role in how investments are done and tracked. Anand Radhakrishnan, Managing Director, Sundaram Mutual Fund, shares his opinion about how this factor is turning into a significant tool and how it will shape the strategies of his company
What If Donald Trumps?
The potential election of Donald Trump as president in the U.S. carries significant implications for the Indian equity market. It could lead to changes in the global trade dynamics, in particular affecting the Indian IT sector while also raising inflation levels and leading to yet another revision in the visa programme for Indians who want to work in the US. The article takes a closer look at what may lie in store
Sectoral Gains Make A Mark
Benchmark indices continued their uptrend, reaching new record highs, although the pace has slowed as the broader markets faced selling pressures
