Concerns over a
possible Greek exit from the euro-zone and a lacklustre Indian economy have given
Indian markets a double whammy. The Finance Minister’s announcement that austerity
measures are needed has only added to the anxiety. In these tough times, what
should you tell your investors? Read on to find out what top industry officials
Rajiv Anand, MD & CEO of
Axis Mutual Fund, recommends that investors should invest through equity
diversified funds and increase allocation to SIPs.
you don’t think that India is going to grow at 7%, then you should buy fixed
income. If you think that India is poised for a 7% growth then there is huge
amount of value in stocks currently. If you want to build a high quality
portfolio for the long term, then I think the market is providing you that
opportunity now. If investors stay invested in diversified equity funds then
they can’t go wrong.
year there is a different event. Events come and go. Today we are talking about
Greece and in a year we’ll talk about some other event. Yes, there is no
denying that there are issues in Europe but investors are probably not seeing
that commodity prices have come down globally and are expected to fall even
further. This is positive for India. Over a period of time that will percolate
into the Indian economy.
have heard distributors complaining that SIPs have not performed when there was
a secular market upturn from 2003 to 2008. Now when the markets are falling
people are complaining that they are not getting any returns. SIP is about
disciplined investing and you need to eliminate emotions from investments. I
would urge that investors should increase allocation in SIPs. Have faith and
patience and you’ll be rewarded.
Executive Director, CIO–Equity, Pramerica Mutual Fund, suggests staying with
will continue for some more time. Apart from the global uncertainty we have our
own problems as well. So it’s a double whammy. The European situation needs to
stabilise, at least momentarily. Strong actions particularly on the reforms
side are needed.
should always continue. Equity will remain to be the best asset class over the medium
to long term. Markets only allow opportunities during these uncertain times. I
would advise investors to look at diversified large cap funds because any
recovery in the market will reflect in large cap stocks first. If there is any
further uncertainty large caps are better placed to tackle volatility.
Debashish Mallick, MD &
CEO of IDBI Mutual Fund, says that investors can look at index funds if they face
difficulty choosing stocks.
with risk appetite can invest in equities now through diversified funds. I
would suggest steering clear from sector or thematic funds. SIPs should
continue. Lump sum investment can also be done over next three months or more. At
this juncture index funds also look good because the broader market has gone
down. If you are unable to choose which stock to invest in, index funds are