Says Rishabh Parakh, Chief Gardener, Money Plant Consultancy, a leading Tax & Investment Advisory services, “Global factors such as fall in Chinese stock market and domestic issues like delayed GST bill, coupled with no immediate positive triggers has led to a very negative and fearful start for the Indian stock market. There is too much of panic amongst the investors and trader community at this point of time. The recent fall in the Chinese market has affected the Indian markets in a big way but one should note that this impact is short term in nature as the overall macro indicators of India are improving.”
Should retail investors now review their portfolio?
Financial experts note that it is important for every investor to keep reviewing his financial portfolio from time to time. When stock markets were riding high in 2014, most investors jumped in, to invest in the stock market. Sadly the sailing has not been smooth for most investors, in the last few months, due to an ongoing turmoil in the global markets. Experts note that at this point of time investors should stay invested for the long term as the India growth story looks positive in the years to come.
“It’s best to stay invested for the long term at this juncture. Looking at the way the Indian economy is shaping up, with an increase in the GDP, and falling crude oil prices, along with other positive factors, one should invest or rather stay invested in the stock market for the long term,” notes Parakh adding that for the next three to five years, one should invest in the equity space for good returns, through stocks or take the mutual fund route and build a strong portfolio for the future.
Stay cautious while picking stocks
While equities are one of the best classes to invest in as it will outperform other investment avenues in the future, it is also equally important that an investor stays cautious while choosing stocks, note experts. Instead of relying on tips and speculating, which most Indian retail investors do, it is important to study the stock closely, look at its fundamentals and then go ahead with your investment. “Many a times, investors buy stocks on the basis of its current market price rather than focusing on its core strength and business fundamentals. An ideal investor is the one who stays away from the vagaries of the stock market. In fact, if Indian markets correct at a reasonable valuation because of global factors then it is a wonderful opportunity to enter the market,” adds Parakh.
In the recent past, not just the equity markets but also other options such as investing in gold and property has also shown a bumpy ride. While there seems to be a dilemma amongst retail investors if they should invest in gold or buy a property or invest in the stock market, experts note that gold and property have already run its course and does not command strong positive sentiment in the near present, whereas the stock market is also in a correction mode yet with a strong positive outlook in the near term.
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