Business News Desk -The year 2025 is near. It has become important for retail investors to focus on a strategy that protects them amid global challenges. The good returns received from the stock market in the last 2-3 years have greatly increased the confidence of investors. This is worrisome. The reason for the current rise in the market is high liquidity. The prices of some shares have increased significantly. In view of the presidential elections in America, tensions in the Middle East and the conflict between Ukraine and Russia, this is the time to be cautious.
Foreign investors are withdrawing money from the Indian market
Indian markets are expected to perform well. But you have to watch your expectations. India’s story looks great in the long term. But, there is a need to be cautious in the short term. Foreign investors have sold Rs 88,818 crore in October. They are investing in cheap markets like China and Japan. Due to this the fear of capital leaving India has increased. As on October 28, the trailing 12-month price-to-earnings ratio of BSE Sensex was 24.1 times, while that of Nifty was 23.7 times.
Stocks giving good returns are less likely to give high returns.
India’s long term story is good and the gap between earnings and valuation will narrow. But investors have to be careful in choosing the right sector. The reason for this is that stocks giving good returns are less likely to perform well again. Inflation and reduction in interest rates will affect the market. These things have to be kept in mind while taking the right investment decision. The results of the presidential elections in America will impact India. If Donald Trump becomes President again, tariffs may increase, which will affect India’s exports.
Success of IPO of every big company is not guaranteed.
The IPO market is expected to continue to be bustling. IPOs of Swiggy and Oyo are coming. If the listing is good then the inclination of investors will improve. But, looking at the IPOs of Paytm, Reliance Power in 2008 and recently Ola Electric, it is important to understand that big IPOs do not guarantee success. Therefore investors need to be cautious. In such a situation, retail investors will have to take special care of diversification.
Create a financial plan according to your needs
There is no dearth of investment advice today. But, it’s important to remember that personal finance decisions should always be personal. Instead of following the advice of others, you will have to make a financial plan according to your needs. If your age is above 30 years, 40 years or 50 years then you need to see where your savings money is being invested. How much of your money is invested in shares, real estate, gold and fixed deposits? If most of your investments are outside the stock markets, why should you worry about daily market fluctuations?
Good option for mutual fund investment for long term
If you can take some risk then you can invest some part of your savings in mutual fund schemes. By investing through SIP you will get the benefit of rupee cost averaging. You can also use a Systematic Transfer Plan (STP) to invest in the market gradually. Keep in mind that investment opportunities arise only when the market falls. If you want to invest for long term then you can invest in multicap, flexicap and midcap funds.
