Stock markets witnessed the worst week since the global financial crisis in 2008 as virus-related disruptions fueled fears of a recession in the US and Eurozone. Benchmark US indices S&P 500 and NASDAQ fell over 10%. While the speed of correction is scary, do note that this is not the first time this has happened. In fact, this is the 47th worst 6-day correction in the US Dow Jones index in its over 100+ year price history.
Of course, investors are asking what next? In a twitter poll we ran, while 35% of investors voted the time to buy the dip is now, around 39% of investors chose to SIP and chill.
We are big fans of sticking to your plan and your asset allocation. If your plan was to buy on dips, do that. If it wasn’t, don’t. Don’t buy on dips just because your friends are. Similarly, sell if you need the money for a planned expense. Don’t sell thinking you will be able to buy back lower, it is easier said than done. In short, no one knows how this will actually play out. So keep it simple.
We have written previously on how to manage emotions during market turmoil, you may want to read that again –
- In investing the simplest things are the hardest
- 3 ways to make sure this stock market correction is not wasted?
- How to Manage Expectations For Higher Returns?
- How To Survive a Volatile Equity Market?
- What makes a great investor?
Gold is up over 10% in 2020 thanks to risk aversion due to coronavirus. Gold prices hit a record high in India this week, as Gold is an effective portfolio diversifier in times of crisis, besides being a shield against inflation and a lender of last resort during economic uncertainties. All top 5 best performing funds this week were gold funds. Our founder and CEO Gaurav (@rustapharian) spoke with CNBC-TV18 about investing in Digital Gold.
As risk aversion prompts a big spiral up in gold prices today we look at the option of investing in digital gold. How does it work? And what are the advantages & disadvantages of this option vs other financial forms of investing in gold like Gold Funds or ETFs. We discuss with Gaurav Rastogi, Founder & CEO of Kuvera.
CNBC-TV18 यांनी वर पोस्ट केले गुरुवार, २७ फेब्रुवारी, २०२०
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Movers & Shakers
1/ Aditya Birla Sun Life Mutual Fund has announced that Claude A Accum has ceased to be an Associate Director of Aditya Birla Sun Life AMC Limited with effect from 24 February 2020.
Quote of the week:
But the world is ever more interdependent. Stock markets and economies rise and fall together. Confidence is the key to prosperity. Insecurity spreads like contagion. So people crave stability and order.
: Tony Blair
Interested in how we think about the markets?
Read more: Zen And The Art Of Investing
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#MutualFundSahiHai, #KuveraSabseSahiHai!
Ram Singh
March 2, 2020 AT 19:51
Thanks for launching Digital gold. I am really interested in diversifying my existing portfolio. I have a query before I buy Digital Gold through Kuvera, which is, How Kuvera ensures that I might not become victim of “counter party risk” down the line? I am not saying Kuvera or its associates would default. Its just I am considering worst case scenario. This thought is troubling me. Makes me wonder “Is physical gold is any day better than digital gold ?”, since “its not really my gold until I have it in my hands”. Third parties might play nasty games when I would really need to liquidate digital gold holdings during my rainy day down the line.
Gaurav Rastogi
March 3, 2020 AT 02:37
The entire process has checks and balances. There is a security partner (BRINKS) and a custodian (IDBI Bank). Of course, all risk can never be mitigated, just as a robbery at home or bank locker can also happen but the probability of it is very very low.