03 Nov Raging Bulls
The bulls are on fire. The markets are rocking. People have made stupendous returns. Like always some people seem to believe the party will never end. Like always those who shunned away from the market, are dying to invest. For any Financial Advisor, these are good times indeed. But at the same time, if the Advisor does not manage his clients well, especially in times like these, he or she may as well walk into a trap. While nobody can predict the near future, we know that the long term looks good and investing should continue. We also know that while markets have gone up considerably, nothing can keep rising infinitely. It has to slow down, correct itself; or experience turbulence.
In short, uncertainty is very much present, and hangs like a Damocles sword at all times.
One may consider employing the following steps in current conditions:-
- For customers who have seen sharp growth in their wealth, you should look at asset re-balancing. Time to reduce equity.
- For long term SIP customers, one may consider switching their corpus into an asset allocation fund, like Balanced Advantage kind of schemes if goals are still at a distance, or, in a Equity Savings Fund if the goals are near. However they need not stop their SIPs. The process should continue because of markets correct they might as well smile a little more.
- For new customers, one should ensure that their initial experience isn’t unpleasant. Hence a mix of SIP, Balanced Advantage and Equity Savings kinds of funds would be good to start with.
Please bear in mind that in investing, there isn’t any guaranteed path. This is because the future always remains an enigma.
Different advisors may have different ways of looking at things with sound reasons. Therefore please treat this as one such approach.
Author: Dharmendra Satapathy at NextLevel-Education