Lok Sabha Elections 2024: The key lies in navigating the volatile markets

livemint.com:

Lok Sabha elections 2024 approach, market volatility is likely to continue, leaving investors anxious about their portfolios. The political landscape significantly impacts market movements, with benchmark indices witnessing substantial fluctuations around election periods. Knowing how to navigate this volatility can help investors safeguard their investments and potentially capitalise on opportunities.

Here, we explore strategic approaches to investing during this dynamic period.Historically, Indian markets have exhibited notable volatility during election periods. Shlok Srivastav, Co-founder & COO of Appreciate, recounts the market's reaction to the 2004 election results. “After the 2004 election results were declared, and the UPA alliance bagged a surprising victory, the stock market reacted negatively in the immediate aftermath.

Market tumbled by 6 percent, the day after the elections and ended the month with a 10 per cent fall in May 2004. Indian markets ended that particular quarter with a manageable 5 per cent contraction. However, in the six-month and one-year period, markets bounced back with 10 percent and 19 per cent returns."This pattern highlights that while short-term reactions can be severe, the markets tend to recover and even thrive in the longer term.

Hence, understanding and planning for such volatility can be crucial for investors.For long-term investors, riding out the storm is often the best approach. Srivastav emphasises the importance of staying invested during these turbulent times. "Volatility from the polls is unlikely to stay a fixed macroeconomic narrative for long.