Monday, May 19, 2014

Post elections, Continue your regular investments systematically

With the NDA having got a comfortable majority in the just concluded elections, there is high level of confidence among foreign investors who have been buyers for most part of last week taking the BSE sensex to its highest levels achieved ever. Many brokerage houses and analysts have also started predicting the sensex figures for the next 1 year, indicating bullish trends. 
For the average investor there is every possibility of getting swayed by the positive scenario showcased by analysts and it is during such time that its very necessary to reflect on what your investment strategy should be. 

The famous Henry Ford once said " If you do not know where you want to go, any road will do". This means that firstly identify your financial goals and decide the time frame for those goals. If your financial goal is at least 5 to 10 years down the line, then you can think of allocating funds to equity. Many would be already having their SIP (Systematic Investment plans) investments going on. Continue with the same and don't go overboard to do lumpsum investments at present. Even though the new government is expected to boost investments and prop up the economy with the right policy decisions, the actual impact of those decisions will take time to percolate through the economy.  Don't expect any magic in the short term. Remember what the great Benjamin Graham said " In the short term the market is a voting machine while in the long term its a weighing machine".

As always, the markets will continue to remain volatile as we all know that international events also have an impact on our markets.

Investors planning to take short term bets need to be cautious as history has shown that you can never time the markets. In the end patience will prevail. 

Look at equity investing through mutual funds especially through diversified mutual funds and focus on long term wealth creation. In this race of earning good returns in the markets, its the tortoise that wins and not the hare.

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