As television anchors took us through the near 1,000- point drop in the Sensex index, early Thursday morning, following the sharp fall in the US markets, Mumbai-based Vishal Shah, 41, was gleeful. He saw an opportunity. He called up his financial planner Kalpesh Ashar to invest a fat amount of money—he didn’t tell us how much but made it sound it was a chunk—in equity funds. Shah had booked profits from equity funds and sold some of his equity shares in 2017 as he couldn’t justify the (high levels in) market. The booked profits were parked in some ultra short-term and short-term funds. Although Shah comes from a family that swears by equity investments, Ashar introduced him to liquid and ultra short-term funds as a means to bring down the risk levels in the portfolio.
The year 2018 has been volatile, to say the least. Although equity markets have risen by a mere 0.3%, debt funds have been rocked by rising interest rates and fears of deterioration in credit ratings in the wake of downgrades in Infrastructure Leasing & Financial Services Ltd (IL&FS) and some of its subsidiaries. Whichever way the investor looks at, it’s volatility everywhere. Should you just sit on the fence and wait for the volatility to get over or should you continue with your investments and systematic investment plans (SIP) as if nothing happened? The short answer is: nurture your asset allocation.
