Equity or debt, stocks or mutual funds, SIP or Lumpsum or Small Cap or Large Cap. These questions make investors wary about investing and give them plenty to think about. Long-term investments are what investors care about, regardless of whether they’re in stocks, mutual funds or another avenue.
This is a “Black Swan” scenario, in which all businesses and services are disappearing. Except for a few sectors that are thriving, all major sectors are closed. Investors who couldn’t purchase at the high rates can now accumulate units that they can use for future purchases due to the sharp fall in market rates. It’s almost like shopping for clothes at discounts.
The discounted valuations have caused huge inflows to the Indian Mutual Fund Industry. The stock market also experiences huge sell-offs and buys. In the last few weeks, there have been too many movements.
Stocks and mutual funds are both tools for wealth creation. They are all different because of their level of experience and knowledge.
Mutual funds are the best option for people who don’t have a lot of knowledge about investments, portfolios, and other schemes. It is best to use SIPs and can provide incredible long-term returns. Investing has never been easier thanks to technology. You can invest from the comfort of your own home. Investors can easily learn and be informed thanks to AMFI and SEBI being close monitors of the markets and schemes. Equity mutual funds offer portfolio diversification and risk management. Many financial advisors are available to help investors build their portfolio and lay the foundation for their success.
Stocks can be a good investment for people who are experienced in trading, have knowledge of volatility markets and can manage the pressure of bear. With just a few clicks, the stock market can make you rich or poor. Even those who are experienced have suffered many losses. Two months ago, the Indian Stock Market was at its peak. Many would have put money in the hope that it would rise further. But then, with the onset COVID – 19 pandemics, all stocks began to bleed. This caused a significant loss of money. While those who were able to understand the situation saved their money, many others suffered huge losses. With many announcements by the govt. and RBI, it is evident that the markets are in recovery mode. The stock market requires patience and the willingness to take the risk of losing it.
Market Biasness is a term used by market experts to describe investors who are more likely to book losses than profits. When stocks or funds fall into the red zone, they panic. It is impossible to predict the market. This panic is caused by Coronavirus. If the next 20 years were different, it would have been very different. The market has had more bad times than the 2008-2009 recession, the Harshad Mehta Scam, or the Spanish Flu that killed thousands around the world. However, markets always rebounded sooner than expected.
It is important to have the right portfolio, with the right asset allocation and patience to see it bear fruit. It is important to always think about the whole decade, not just the months.