Here are some tips to allay the fears of Indian investors due to the Russo-Ukraine war.
Indian investors have been stirred up after the war between Russia and Ukraine broke out. The stock market goes through periodic turbulence due to various factors. Two years ago, it was a pandemic. Now, this is war.
As exam time approaches, investors need to avoid panic. Hasty liquidation of investments often may not require recording a loss. Sometimes, it’s best to stay put. You may suffer short-term losses from the ongoing turmoil. But it will help if you don’t let it affect your long-term financial planning and your investment goals.
The stock market has seen it all in the past – recessions, pandemics, wars and political turmoil. It has also bounced back and given returns to those who were invested. Here are some tips to allay the fears of Indian investors due to the Russo-Ukraine war.
Avoid hasty decisions
It is not advisable to end investments in a volatile market in a hurry. After the market boom, your decision may soon turn into regret. More specifically, a short drop shouldn’t be the only reason you want to sell. There needs to be a more compelling reason for the liquidation, such as achieving an investment goal or avoiding a very specific risk that hurts you badly — for example, owning stock in a company whose revenue The primary source is Russia. If there are no other compelling reasons, it may make more sense to present your case. Recovery can happen soon. It is better not to panic when you see your investments in the red. Continue investing in such a way that your objectives are set.
diversification of investments
It is a good idea to diversify your investments across different asset classes to offset the risks of any one class. Depending on your financial goals, you can allocate a part of your wealth to options like provident fund, real estate, gold, or bonds – or even bank deposits. The right mix of investments made according to your investment objectives will keep you afloat in any economic season.
Check Your Financial Goals
Your financial goals will guide you through uncertain times. Your goals should help you decide whether to stay invested or withdraw your investment. For example, suppose you have invested in a five-year SIP, and after three years, something unexpected like a war happens. In that case, you will still have to wait two years for your investment to recover from the rise or fall.
Think Before You Switch Your Investments
Equity markets may weaken in response to the global crisis. Nevertheless, investors should not rush to change their portfolio without hesitation. These decisions should be guided by firm investment principles and wisdom and not a knee-jerk reaction to volatility. Social and political tensions will have an impact on the market. But in a crisis, think about why you invested. Clarity will help you avoid costly decisions.
(The author is the CEO of Bankbazaar.com)