Yes stock markets are dipping insignificantly and creating fear and doubts in people’s mind. What should you do in these type of situations when markets looks skeptical and unpredictable to you?? We have got you covered.
Some questions running in your head!
You must be thinking, is this the right time to invest? Will stock markets recover from these levels like covid situation ( v-shape recovery)? Is this the time to buy mutlibaggers? Should we invest in stocks? What stocks to buy?
I will explain you with an example……..
This is an equity valuation index chart which represents the valuation of an economy. Through this chart we come to know about in which zone stock markets are trading. As per May 2022 the valuation is 114.7 that is neutral not soo high not soo low.
During Covid times it went till the dark green area of aggressive invest in equities, from where the chances of recovery are high. This chart shows a bigger of markets overall.
Now if you are planning to invest in equities for long term, you could use STP option to dump in equities. As we are in neutral stage you could consider investing 50% in equity oriented funds directly and 50% in debt funds for STP purpose. Consider having a STP of 3 months to 6 months. When we enter in light green area, you can increase the allocation towards equity to 60-70%.
As a long term investor you don’t have to worry at all, because this is what the nature of markets your job is to just invest and forget, same way as you are doing in FD.
If you are not able to understand anything consult with our Financial Advisor now……..
– Pooja Patel, CFP CM