CNN Central News & Network–ITDC India Epress/ITDC News Bhopal: The recent Lok Sabha election results have sent ripples through the market, catching many by surprise as the Bharatiya Janata Party (BJP) secured fewer seats than anticipated. This unexpected turn led to a notable downturn in the Sensex.
While political shifts may occur, the fundamental aspects of India’s economy are expected to remain relatively stable in the short term. This presents a unique opportunity for mutual fund investors to reconsider their investment strategies, particularly by either initiating new Systematic Investment Plans (SIPs) or strengthening existing ones.
Despite the prevailing uncertainty surrounding the political landscape, experts maintain a positive outlook on India’s long-term economic growth prospects.
What should SIP investors do?
For investors already engaged in SIPs, adhering to their investment plan and potentially increasing contributions during market downturns could prove sensible. Market timing, as cautioned by experts, is often a risky attempt. Instead, they encourage for a consistent investment approach, emphasizing the merits of rupee cost averaging.
Rupee cost averaging involves investing a fixed amount at regular intervals, irrespective of market fluctuations. This strategy enables investors to purchase more units when prices are low and fewer units when prices are high. Over time, this disciplined approach tends to result in a lower average cost per unit and may enhance overall returns.