Caution is the watchword for retail investors, as the Sensex plunged 343 points — or 2% — on Monday after dismal industrial growth data.
But the expert advice for long-term investors: Don’t get swayed by the volatility. Stay put in the market and don’t shuffle funds between stocks and other assets.
In line with the Sensex, the National Stock Exchange's Nifty index closed at 4767, down 102 points or 2.1%.
Bombay Stock Exchange’s premier index has lost as much as 1,000 points in three sessions. Lingering uncertainties on economic revival in Europe have been compounded by Indian industrial output data that showed a 5.1% slump in October from the year-ago period.
Chronicle of a slowdown foretold: voices & choices
“Retail investors should not enter the market right now, but those having long term investment horizon can invest 10-20 % of their investible amount in blue-chip stocks and remaining in gold and fixed income instruments,” said Sudip Bandyopadhyay, managing director and chief executive officer, Destimoney Securities.
“Investment at any point of time should be in tune with the financial planning needs of a person,” said Ranjeet Mudholkar, CEO, FPSB India.
Experts also see a fall in interest rates next year — and suggest that getting into fixed deposits now to lock in higher rates may be a good idea. “Its good idea to invest some amount in FDs as interest on them have peaked,” said Surya Bhatia, promoter, Asset managers.