How to Invest in Volatile Markets and Avoid Making Poor Decisions

The S&P BSE Sensex is moving like a pendulum between 25,000 to 27,500 levels, having come off its peak level of 30,000 that it reached on 4th March, 2015. It reflects the constantly changing economic environment and the conflicting views of investors. It therefore becomes a challenge to take a firm view on a variety of inputs including interest rates in the US, the impact of the monsoons, the state of reforms in India, and the nervousness on near term earnings.

In such markets most of us go through many behavioural swings and tend to generally jump from one strategy to the other.

A long period of such oscillation tends to bring some amount of boredom and boredom in investments is dangerous! It can result in poor quality decisions that have serious implications on wealth creation and achievement of financial goals.

Some of the consequences of the oscillation

Investors switch strategies without thinking the long term implications of such moves. Because they did not have a solid reason for switching strategies, subsequent behaviour of the asset classes in which they have invested have even more profound impact on the behaviour of the investor.

Since the profit is booked and removed periodically, the impact of compounding is reduced.

The most serious risk of such changing strategies is that the investor does not reach his or her financial goals.

All the above disadvantages mean that it makes sense to stick to a strategy and not be fooled into boredom by the near term oscillation of the market.

Remember, it is best to

Therefore while it doesn’t make sense to pay attention to the market that swings like a monkey, what should rather be idealized is the famous three monkeys who preach – hear no evil, see no evil and speak no evil. In the investment context it means keep yourself away from the chaos that diverts your investments from your financial goals.

At Quantum, the investment strategy for Quantum Long Term Equity Fund, does not change with changing market scenarios. The focus is always on stock specific issues and valuations.

Name of the Scheme & Primary Benchmark	This product is suitable for investors who are seeking*	Risk-o-meter of Scheme
Quantum Long Term Equity Value Fund An Open Ended Equity Scheme following a Value Investment Strategy	• Long term capital appreciation • Invests primarily in equity and equity related securities of companies in S&P BSE 200 index.	Investors understand that their principal will be at Moderate Risk

Disclaimer, Statutory Details & Risk Factors:

The views expressed here in this article / video are for general information and reading purpose only and do not constitute any guidelines and recommendations on any course of action to be followed by the reader. Quantum AMC / Quantum Mutual Fund is not guaranteeing / offering / communicating any indicative yield on investments made in the scheme(s). The views are not meant to serve as a professional guide / investment advice / intended to be an offer or solicitation for the purchase or sale of any financial product or instrument or mutual fund units for the reader. The article has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate and views given are fair and reasonable as on date. Readers of this article should rely on information/data arising out of their own investigations and advised to seek independent professional advice and arrive at an informed decision before making any investments. Please visit – www.quantumamc.com/disclaimer to read scheme specific risk factors.

Above article is authored by Quantum.

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