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 are saying.
Rajiv Anand, MD & CEO of Axis Mutual Fund, recommends
that investors should invest through equity diversified funds and increase
allocation to SIPs.
If 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.
Every 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.
We 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.
Ravi Gopalakrishnan, Executive Director, CIO–Equity,
Pramerica Mutual Fund, suggests staying with large caps.
Volatility 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.
SIPs 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.
Investors 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 ideal.
Source: http://www.cafemutual.com/News/InnerNews.aspx?srno=1379&MainType=New&NewsType=Industry&id=21
Posts
