How to invest in this volatile market?

Okay, so we all know that the stock market is highly volatile! With recession fears looming above our head, some of us are scared to invest money in stocks. And some of us are also happy to buy stocks and equity Mutual Funds at cheap prices! 😉

But as you’re aware, there’s no one-size-fits-all approach to investing! So today, we’ll talk about different options that you can consider in the current scenario, to grow and preserve your money!

This newsletter is going to be really short, but with an interesting announcement at the end. Let’s begin though:

• First of all, I know you must have heard this a lot, but as cliche as it may sound, it’s true - if you don’t need money right now, don’t panic. Just stay invested - whether it’s stocks or Mutual Funds. This is a down cycle of the market, which will improve; just let the market bounce back. If, however, you need money in the short term, you can look at doing an SWP in your Mutual Fund, which is a Systematic Withdrawal Plan. Here, you can slowly withdraw money every month, over a period of time, so that if the market bounces back, you can gain some money from it before it comes into your pocket

• Again, cliche, but if you’re looking at investing for the longer term (5+ years), this is a great time to invest in stocks and equity MFs, because the markets are low, which means you can purchase stocks and Mutual Funds at a cheap price right now. If you want to invest periodically, an SIP is the best option. If you have a lumpsum that you want to invest, do an STP - Systematic Transfer Plan - where you invest the lumpsum amount in a liquid fund, and then at your determined frequency, some of the money gets transferred to the equity fund of your choice. This will make sure that your investment gets averaged out for the duration of the STP.

But what if you’re looking for a shorter duration?

If you’re looking at an investment duration of less than 5 years, DO NOT INVEST IN EQUITY. Equity is volatile, and unless you’re looking at a 4-5 year horizon, don’t put your money here. I would personally not go for debt funds, as they too, carry a risk, even though they’re not linked to the equity market. Plus, the returns generated by debt funds are quite low (we’ll cover these reasons some other time though).

But but but…there are still a lot of great products out there which can give you decent returns!

A lot of new-age companies enable users to invest in “alternate asset classes”. These alternate asset classes are products like bonds, P2P loans etc, which you can invest in, and they can give you returns between 8% to 12%, depending on the product you have chosen. Huge disclaimer - none of these are risk-free, but they’re all “fixed income products”, which are not linked to the market, and give you a fixed income. If done well and with diligence, these can give you decent returns in the short term. Grip Invest and Wint Wealth are two such companies which can enable you to invest in products that are not linked to the stock market. In fact, if you’re investing for the short term and are OK to take some risk, these are the best kind of products you can invest in.

Okay..let’s do this. So I haven’t really met any of our subscribers, but would love to! And since this topic is a little complex, if there are a few of you who would be interested, I can do a 45-60 minute zoom call on the coming Sunday (3rd July) on the same topic - Products and Strategies for managing your money in the current scenario - where we’ll cover alternate asset classes and other ways to manage your money in the current economy. If you’re interested, share your details HERE, and if there’s a significant number of folks who want to attend, we’ll get the webinar organized!

Hey, even if you don’t want to hear about these products, just drop by and say Hi! I’d love to interact with you guys face-to-face (virtually though) 😁

So like I said, today’s newsletter is a short one. But hopefully I’ll see you guys next week and we’ll have an amazing one hour of catching up and talking about money! Till then, adios!

(PS: Don’t forget to like and share this post with friends!) 😁😁