We Market participants are so obsessed with the Nifty/Sensex number that we more often than not forget about the real big picture. Although everyone invests with long term view in mind but is extremely short term oriented as far as emotions are concerned. Unable to have a control on one’s behavior we tend to react on every market move.

Since 1979 till date i.e. from Sensex level of 100 to 32000 odd one can see the direction clearly but still it’s the everyday effect and the urge to act makes it look so risky.

Now the million dollar question on everyone’s mind is what is to be done at Nifty close to Five Digits?? Should we continue investing..Redeem..Hold on to current positions..Too complex decision isn’t it..!! Especially when your neighbor or friend who is a recent entrant to stock market investing tells you the returns he’s generating on a daily basis. The feeling of being left out is worse than the actual loss. Trust me on this as I have personally witnessed it in the past.

Is it really too difficult a question?? YES if you are a trader and follow daily, weekly monthly market trends/ movements & NO for an investor.

As an investor in the market who comes with a 3/5/7/10 years view needs to answer the questions below to get more clarity::

1. What is your Asset allocation: Out of your overall investable assets (besides your home & gold that your possess) how much percentage have you invested in Equities. For majority of the investors this figure won’t be more than 10-15% and I so wish to be proven wrong on it.

2. What is the time horizon with which you had committed funds or about to commit?? Is there a need to withdraw for a specific purpose or just mental satisfaction to have locked in the returns? The challenge is the reinvestment risk that follows..

3. Are you willing to see 10-20% dip in your portfolio returns in order to generate superior returns over a period of 3/5/7 years?

4. Are you nearing your goal for which you had invested the capital for?

5. Have you invested only the amount that you were willing to commit to market for atleast 3 years??

Still confused what to do currently with market making new highs??

1.) Only thing you need to do is to bring down equity component in the portfolio as per your defined Asset Allocation.

2.) Increase you tenure of investment from currently may be 3years to 5 years. i.e. give markets around 2 additional years to reap in the benefits.

These 2 options will sail your through this tough question of timing the market.

Be positive & happy Investing

Kunaall Milwani

SKU Consultants