roper Asset Allocation will help contain losses
There has been recent volatility in the markets due to the fear of Omicron. Have you been worried about its impact on your portfolio? No wonder, the pain of loss is said to be twice as powerful as the pleasure of gain.
If you are a long-term investor, fortunately, there is not much reason to fret. It is suggested that investors should stay calm, evaluate the holdings, stagger the investments and always stick to asset allocation.
# Stay calm and evaluate: Watching markets fall could be unsettling for most investors, especially those who entered the stock market in 2020 and afterward. But volatility is an inherent nature of the equity markets. The correction is a given looking that the markets have shown such a phenomenal rise in the past few months. Investors should stay calm and not be influenced by the market cycles. Evaluation is to be done to see if your portfolio holds long-term potential. If it does, one should continue holding the same.
# Stagger your investment: Since the timing, the market is not possible, experts advise that the new equity investments can be in a staggered manner. That is, instead of investing a lump sum amount in equity at one go, one can consider investing over the next few weeks or months. Staggering your investments through SIP or STP mode is a profound strategy that helps reduce risks.
# Stick to asset allocation: Asset allocation has been a time-tested method to contain losses in any market scenario as it balances the risk and reward aspects of the portfolio. It is nothing but apportioning a portfolio’s assets across asset classes according to an individual’s goals, risk tolerance, and investment horizon. Investors should go through their investment charter to check whether their investment portfolio allocation is in line with their long-term goals.
Conclusion:
The key is to maintain your decided asset allocation and not be worried by short-term fluctuations that may occur. Review on a periodical basis should be done to take any corrective actions towards your Asset Allocation & Goals. We at Nivesh Ki Paathshala, can help you align your Goals and Asset Allocation. Feel free to contact us for any guidance. We will be glad to have a conversation.