Top Money Tips For Investors In A Falling Market: This is the strategy to adopt; some dos and a don't

Money tips: Amid gloomy market sentiment, it is difficult to take wise investment decisions. However, it is important for investors to know why it is important not to panic. They must also learn the virtue of being patient. And importantly, they should know about benefits they will get from investing according to their financial goals. However, to really make money, they should also know what kind of strategy they ought to adopt in a falling market.

To tell you all this, Zee Business invited Hemant Rustagi, CEO at Wiseinvest Advisors and he provided some very useful tips for all investment related problems.

The current situation is dire as the coronavirus has impacted the markets all over the world including India. The selling is high in all markets. The Indian markets have also seen heavy selling, he said.

The situation for mutual funds have also been bad as many funds have yielded negative returns. Hybrid funds and equity funds are also not fairing well.

What to do?
Hemant Rustagi's advice to investors is to maintain calm and remain invested in the market. The market will take time to get back to the normal situation. Selecting the right asset class will be the key, he says. In a falling market, it is always advisable to make a long term equity investment.

Financial Goals should be in sight
Always invest according to your financial goals, he says. All investments should be linked to the goals. For a long term investment, equity mutual funds are the right choice. For medium term goals, hybrid funds should be the right option. For short term, invest in debt funds.

The current market situation will be impacting the equity investments, so the investors should take a long term view before making investments in equity. For a 10-15 year period at the time of your retirement, equity funds are the right choice.

Global markets have seen similar situations in the past too. In 2009, swine flu, 2003- SARS, 2010- Cholera, 2006- Avian Flu.

The markets were down during these times too. The recovery period was between 6-12 months. The coronavirus impact is likely to remain for a longer period.  

So, it is very important to continue your SIPs even when markets are falling because, in a falling market, investors will have greater opportunities to buy more MF units for less amount of money. In the long run, higher number of units will help investors get rich.

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There is also a mistake that investors must not commit - never try to time the markets.