Volatile Markets and SIPs: What should mutual fund investors do?
Amid a volatile market , many investors are questioning whether they should continue their Systematic Investment Plans (SIPs) or pause until stability returns. However, market experts recommend continuing SIPs, citing reasons such as attractive valuations, lower average purchase prices, the benefits of habit formation, the impossibility of timing the market, and the long-term advantages of compounding.'When equity markets fall, valuations also fall, making investments at a lower price more attractive; therefore, when the market falls, it is the best time to continue SIP, discontinuing SIPs can hamper the investors' ability to save and invest, and take away the discipline of long term investing, the investor thinks that he/she can enter again or restart at lower prices, but it's not always possible, and lastly the whole idea of a SIP is to do away with market timing speculation and stopping a SIP can disrupt the process of compounding,' Vishal Dhawan, CEO, Plan Ahead Wealth Advisors, a wealth management firm in Mumbai told ETMutualFunds He added that since equity investing is aimed at long-term compounding benefits, one can start SIPs at any time. However, while markets have recovered from their recent lows, periods of market decline typically lead to more attractive valuations. Investing more during such times—when markets are not at their peak—increases the probability of achieving superior long-term returns. 'So, depending on cash flow surpluses, there is a need to try to have a significant portion of the cash flow surpluses going through SIPs ideally.'Another expert cited studies which show that investors' returns and market returns are not the same. This is because an investor is either entering or exiting the market at the wrong time. To achieve their goals, one needs to give time and be patient. That's what SIPs do: help you achieve your goals in a disciplined manner over periods of time.'In the journey, there will always be short-term hiccups, but staying focused on your investments is the only way to achieve your goals,' said Manish Mehta, Joint President & National Head –Sales, Digital Business & Marketing, Kotak Mutual Fund , shared with ETMutualFunds.So far in the current calendar year, the benchmark indices — BSE Sensex and Nifty50 — have gained 4.23% and 4.67%, respectively. Over the past three months, they have risen by 11.27% and 11.86%, respectively, while over the last nine months, they have declined by 1.11% and 1.92%, respectively.In May, Nifty50 breached the 25,000 mark for three days. On May 26, Nifty 50 closed up by nearly 13% from April's low level, and as the benchmark index scales up, many market experts recommend that investors continue with their SIPs, whereas they should stay cautious while doing lump-sum investments and should try to stagger their investments.As an addition to this, Dhawan recommends that currently, valuations are above their long-term averages, especially in the case of mid and small caps, and thus it is preferred to invest through SIPs/STPs. 'However, the ongoing volatility driven by global trade wars and cross-border tensions could present sudden opportunities. Market corrections can be sharp, so it's wise to be prepared for lump-sum investing, besides continuing with SIPs,' he further shared with ETMutualFunds.On the other hand, Mehta recommends that STP is suited when one has some money available for lumpsum investment but varies with market fluctuations and in this case one can park the money in a fixed income scheme and do a STP with a duration of their choice plus if an investor plans to invest out of a regular income stream then SIP fits the requirement where in a disciplined manner one can regularly keep investing.ETMutualFunds looked at the performance of equity mutual fund categories since the April low and found that out of 21 categories, 19 offered double-digit average returns, and two, pharma and consumption-based funds, gave single-digit returns in the same time frameSince April 7, the Auto sector-based funds offered an average return of 19.13%. Technology-based funds gave a 17.44% average return in the same period. International funds gave 16.83% and infrastructure funds delivered 15.95% average return in the same period.Mid-cap and small-cap funds gave 15.86% and 16.42% respectively since April's low level. Contra and large-cap funds were last in the list of double-digit gainers. The categories gave 11.92% and 11.03% respectively in the mentioned period.As the categories gain since April's low and the market being still volatile, Mehta recommends that long term wealth creation can happen through regular investments in equity oriented schemes to support which there is enough historical data to demonstrate long term wealth creation through equity schemes and since SIPs are recommended over longer time horizons, investments in multicap / flexicap / large and midcap kind of schemes.According to a release by Motilal Oswal Private Wealth, large-cap valuations are now around their 10-year average, while mid- and small-caps still trade at a premium, though select opportunities exist.Dhawan further shared with ETMutualFunds that currently, large-cap stocks offer attractive valuations compared to small and mid-caps, which makes them a smart starting point for SIPs (Systematic Investment Plans), especially in funds that are currently overweight in the large-cap category, and these funds are also safer for new investors.He adds that different assets perform well in different timeframes; therefore, your portfolio should include multi-asset funds. Geographical diversification is crucial for any robust portfolio, so consider adding global or international funds to reduce reliance on the domestic market and gain exposure to different economies and currencies. Additionally, under debt funds, one can consider short-term funds for short-term goals and long-term funds to take duration exposure, and for those in higher tax brackets, equity savings and arbitrage funds offer good options for short-term fund parking, he informed ETMutualFunds.One should always choose a scheme based on risk appetite, investment horizon, and goals.: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@timesinternet.in alongwith your age, risk profile, and Twitter handle.
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Mint
13 hours ago
- Mint
Buy or sell: Sumeet Bagadia recommends three stocks to buy on Monday — 18 August 2025
Buy or sell stocks: The Indian stock market finally snapped a six-week losing streak as extreme oversold conditions and supportive global cues lifted investor sentiment. The Nifty 50 and Sensex ended the week with gains of around 1%, though momentum remained muted due to persistent foreign outflows. Foreign Institutional Investors (FIIs) continued their aggressive selling, offloading nearly ₹ 10,000 crore in the cash market, while Domestic Institutional Investors (DIIs) absorbed the pressure with strong buying worth ₹ 19,000 crore. Broader markets staged a recovery across sectors, led by pharma and auto stocks, though FMCG lagged. Sumeet Bagadia, Executive Director at Choice Broking, believes the Indian stock market sentiment has improved after successive rallies in two straight sessions. However, the Choice Broking expert said the Nifty is facing an immediate hurdle at 24,650. On breaking above this level on a closing basis, Bagadia predicted another 100-point rally in the 50-stock index. Speaking on the outlook of the Indian stock market, Sumeet Bagadia said, "The Indian stock market bias has improved after the relief rallies on the last two sessions last week; however, the 50-stock index trades in a tight 24,300 to 24,650 range. The broader range of the key benchmark index is 24,000 to 24,800. A bullish or bearish trend can be assumed on the breakage of either side of this range. If the rally extends further, we may see the Nifty 50 index touching 24,800 levels." Sumeet Bagadia of Choice Broking advised investors to maintain a stock-specific approach and look at stocks that look strong on the technical chart. Asked about such stocks, Bagadia recommended buying these three shares: Maruti Suzuki India Ltd, Bajaj Finserv, and Power Grid Corporation of India. 1] MSIL: Buy at ₹ 12,936, Target ₹ 14,300, Stop Loss ₹ 12,300. Maruti Suzuki India Ltd's share price is currently ₹ 12,936, consolidating within a defined range over recent sessions. The stock is now on the verge of breaking out of this range, with price action supported by consistent trading volumes, a sign of steady accumulation and strong market participation. If Maruti Suzuki India Ltd's share manages to sustain above the ₹ 13,000 mark, it could confirm the breakout and open the door for further upside toward higher targets. Such a move would indicate the continuation of its prevailing bullish trend. Momentum indicators back this view. The Relative Strength Index (RSI) is at 63.90, trending upwards, signalling strengthening momentum. Maruti Suzuki India Ltd's share price is comfortably trading above all its key moving averages, short-term, medium-term, and long-term EMAs, which suggests robust underlying strength and a supportive trend structure. From a price action standpoint, the consolidation near the highs and volume-backed breakout potential point toward bullish dominance and an attractive risk-reward opportunity. Given the emerging technical setup, traders may consider buying Maruti Suzuki India Ltd shares at the current market price of ₹ 12,936, with a stop-loss set at ₹ 12,300 to manage downside risk. A sustained move above ₹ 13,000 could propel the share price toward the ₹ 14,300 target in the near term. 2] Bajaj Finserv: Buy at ₹ 1925.10, Target ₹ 2130, Target ₹ 1830. Bajaj Finserv's share is currently trading at ₹ 1,925.10, having seen a strong upmove from lower levels in the past. After a record high, the stock witnessed a healthy retracement, allowing it to cool off from overbought conditions. Recently, it has been taking support from its long-term EMA, a key dynamic support level, and is now showing early signs of a potential reversal. A sustainable move above ₹ 1,980 could confirm this reversal and open the door for further upside in the near term. Such a move would suggest that the bulls are regaining control after the corrective phase. Momentum indicators support this outlook. The Relative Strength Index (RSI) stands at 39.84 and shows a reversal from lower levels with a positive crossover, indicating an emerging uptrend. Additionally, Bajaj Finserv's share is trading above its long-term EMA and is now approaching its short-term and medium-term EMAs, signalling improving technical strength. From a price action perspective, the rebound from the long-term EMA combined with early momentum recovery suggests that the downside risk is limited, making the current setup attractive from a risk-reward standpoint. Given the emerging reversal signals, traders may consider buying Bajaj Finserv shares at the current market price of ₹ 1,925.10, with a stop-loss set at ₹ 1,830 to manage downside risk. A sustained move above ₹ 1,980 could propel the stock toward the ₹ 2,130 target soon. 3] Power Grid Corporation of India: Buy at ₹ 288.70, Target ₹ 320, Stop Loss ₹ 275. Power Grid Corporation of India's share price is currently trading at ₹ 288.70. After bouncing from lower levels, the stock has entered a consolidation phase within a defined range. This consolidation has also taken the shape of an Ascending Triangle pattern on the daily timeframe. The stock is currently taking support near the lower boundary of this formation, hinting at a potential base for the next directional move. If the stock manages to sustain above the ₹ 300 level, it could confirm a breakout from this pattern and open the way for further upside toward the ₹ 325 target. Such a breakout would mark a shift in momentum from consolidation to bullish continuation. Momentum indicators support this view. The Relative Strength Index (RSI) stands at 45.75, showing an upward trend after reversing from lower levels and forming a positive crossover, signalling improving buying interest. Power Grid Corporation of India's share is also trading near its short-term EMA and is approaching its medium-term and long-term EMAs. A sustained move above these levels would further strengthen the bullish case. From a price action standpoint, the combination of firm support at the lower end of the formation and improving momentum suggests the potential for an upward breakout, offering an attractive risk-reward setup. Given these technical signals, traders may consider buying Power Grid Corporation of India shares at the current market price of ₹ 288.70, with a stop-loss set at ₹ 275 to manage downside risk. A sustained move above ₹ 300 could soon drive the stock toward the ₹ 325 target. Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
Time of India
13 hours ago
- Time of India
Nifty may swing -11% to +4% around 25,000; macro uncertainty clouds outlook: Report
Representative image Nifty 50 could fluctuate between 11 per cent below and 4 per cent above its year-end target of 25,000 as markets face a host of uncertainties, according to a report by BofA Securities. As per news agency ANI, the brokerage said that possible US trade tariffs on Indian goods, a shaky US economic outlook, delays in policy responses, and upcoming elections in six major Indian states could all weigh on investor sentiment. These six states together account for more than 16 per cent of India's public subsidy and capital expenditure. 'We keep our Nifty year-end target intact at 25,000 but expect Nifty to swing -11 per cent to +4 per cent versus this target as markets react to emerging developments around key factors such as trade tariffs, US economic outlook, Fed/RBI cuts, and potential fiscal support to offset tariff impact,' the report noted. BofA expects Nifty earnings to grow 7 per cent in FY26 and 11 per cent in FY27, well below market expectations of 9 per cent and 15 per cent respectively and warned that each earnings season could trigger short-term corrections rather than sustained rallies. The firm added that timely legislative and fiscal reforms, funded by higher RBI dividends, asset sales, fuel duties and leveraged infrastructure spending, could lift market sentiment and provide upside potential. Publicly available data show that both the Nifty 50 and BSE Sensex have been struggling, each in the midst of their longest losing streak in over two decades. They are down about 12.6 per cent and 11.7 per cent respectively from their record highs in September last year, with a roughly 3 per cent decline so far this year. On Thursday, however, both indices ended slightly higher in a volatile session. The Sensex rose 57.75 points (0.07 per cent) to 80,597.66, while the Nifty gained 11.95 points (0.05 per cent) to close at 24,631.30. Gains in IT, pharma, banking and consumer durables were offset by losses in metals, oil and gas, and FMCG. Vinod Nair, head of research at Geojit Financial Services, was quoted by news agency PTI as saying that softer US inflation data and a dovish outlook supported IT and pharma stocks, while hopes for a consumption-led recovery lifted banking and consumer durables. Adding to the broader macro picture, S&P Global Ratings has upgraded India's sovereign credit rating to 'BBB' with a stable outlook, the first such improvement in nearly 19 years, citing robust growth, fiscal discipline, and favourable monetary policy. S&P said the possible impact of US tariffs on India would be 'manageable,' pointing out that around 60 per cent of the country's economic growth comes from domestic consumption, making it less reliant on trade. Stay informed with the latest business news, updates on bank holidays , public holidays , current gold rate and silver price .
News18
16 hours ago
- News18
Nifty may swing between -11% to +4% around 25,000 amid macro uncertainty: Report
New Delhi [India], August 16 (ANI): Nifty of National Stock Exchange (NSE) may swing between -11 per cent and +4 per cent from its year-end target of 25,000, as markets navigate a range of evolving macro risks, including potential trade tariffs, shifts in the US economic outlook, and central bank policy actions by the Fed and RBI, BofA Securities said in a report. BofA points to several key risks clouding the market outlook — including potential US trade tariffs on Indian goods, a cloudy US macroeconomic scenario, delayed or insufficient fiscal and monetary policy responses, and the implications of state elections across six major Indian states, which together account for over 16 per cent of India's public subsidy and capex spending.'We keep our Nifty year-end target intact at 25k but expect Nifty to swing -11% to 4% vs this target, as markets reacts to emerging developments around key factors such as trade tariffs, US economic outlook, FED/RBI cuts, potential policy/fiscal support to offset tariff impact, etc," the report firm expects Nifty earnings growth to remain subdued, projecting 7 per cent growth in FY26 and 11 per cent in FY27, well below the Street's expectations of 9 per cent and 15 per cent, respectively. Each earnings season, it warns, could bring corrections rather than sustained firm sees a potential upside if India implements some timely legislative and fiscal reforms, possibly funded by higher RBI dividends, asset sales, fuel duties, and leveraged capex to publicly available market data, the Nifty at NSE and the BSE Sensex have not performed as expected, as both benchmarks have continued their worst losing streak in over two decades. Nifty 50 and Sensex have so far declined about three per cent, contributing to cumulative drops of approximately 12.6 per cent and 11.7 per cent, respectively, from their all-time highs set in September last year. (ANI)
