The equity markets registered their biggest daily fall on Monday since November as the selloff continued for the fifth straight session. Since January 17, the two market indices — Sensex and Nifty — are down more than 5%.
The market meltdown is likely to have forced investors to relook at their investment strategies, with some wanting to redeem and others looking to invest more.
In such a scenario, what is the opinion of MFDs and RIAs and what are they telling their clients? We spoke to several MFDs and RIAs on the matter and most of them said they are advising clients to stick to their investment plans and not to pay much heed to the noise in the market.
"We are not recommending clients to buy on dips. What has happened is that while equities are now cheaper as compared to a week ago, they are still at a fairly significant premium to long term averages," said Vishal Dhawan of Plan Ahead Wealth Advisors, adding that he is recommending clients to continue with their SIPs.
Vinod Jain of Jain Privy Client said, "It's not a crash. The market has just come down by 2-3%. We are not going out of the way to suggest anything to clients. The asset allocation remains the same.”
Shifali Satsangee of Funds Vedaa says the selloff in the market is on expected lines and investors can take the STP route to take advantage of the volatility.
"In case one wants to put a lumpsum, one could look at balanced advantage funds since most of them, have trimmed down their equity allocation at the moment to quite an extent," she said.
Garvit Chaharia of Deeva Ventures feels that small corrections like the present one do not warrant a change in the investment strategy.
He says market-driven investment calls carry risks both for investors and MFDs. "In such scenarios, there is an equal chance of a call going wrong. If I recommend lumpsum investment now and the markets fall further, the investor will lose money and I will lose my reputation," he said.
"The other disadvantage of such an approach is that you end up spending all your time in managing the same AUM. The better way, I think, is to get your clients to invest as per the plan so that you can focus on acquiring new clients," he added.
