Balanced advantage funds: A must-have for your investment portfolio
The Indian financial market experienced significant volatility in the past quarter. Fluctuations were notable during the national elections in June, and now with the recent declines, driven by various factors, such as concerns of recession in the US, the fallout of the Japanese Yen carry trade, and the ongoing geopolitical tensions.
The Indian stock market has a history of both significant peaks and subsequent corrections; be it the Dot-Com Bubble and the subsequent crash, or the global financial crisis of 2008.
Market trends are clearly influenced by both domestic and international events, and investor sentiment and behaviour are critical components of these market cycles.
Indian equity market valuations have reached high levels, with the Nifty 50 and the Sensex surpassing 25,000 and 82,000 benchmarks, respectively.
Despite the market's elevated status, heightened volatility underscores the importance of diversification and strategic fund allocation to mitigate risks and uncertainties.
Risks may not have materialized yet, but they still exist; hence, understanding the underlying dynamics is crucial, as it underscores the importance of maintaining the right asset allocation.
Financial ratios, such as price-to-earnings and price-to-book, can reveal if a company's stock price is inflated compared to its earnings, book value, or revenue, potentially indicating a market bubble.
Investor sentiments, too, play a crucial role, and periods of low volatility in markets can lead to overconfidence among investors.
Suitability & asset allocation
Asset allocation, diversification and portfolio suitability will always be the go-to principles for maintaining sanity in most markets.
Maintaining long-term financial objectives while
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