Market crash got you down? Try this safe investment approach
With the ruling BJP not performing as widely expected in the Lok Sabha polls, the Indian stock market saw a bloodbath on Tuesday. Benchmark indices Sensex and Nifty tanked over 8% intraday. There are apprehensions that BJP’s lower seats tally might slow down reform measures initiated by the ruling government in its second term.
Despite the NDA looking all set to achieve an overall majority, the market remains uncertain and is staring at volatility in the short to medium term. The India VIX has surged 31% to above 28 levels. This uncertainty will certainly force investors to have a relook at their portfolios and opt for investment avenues that will protect them against market meltdown, like we experienced today. Systematic Investment Plan (SIP) is one such financial tool that helps investors handle such situations with ease and ensure that they incur minimum losses.
Mutual fund SIP best investment strategy during market downturns
One of the primary advantages of SIPs is the benefit of Rupee Cost Averaging. With SIPs, you invest a fixed sum of money at regular intervals, irrespective of the market price of the units. This strategy results in the acquisition of more units when the prices are low and fewer units when the prices are high. Over time, this approach leads to a lower average cost per unit. This can prove beneficial in volatile market conditions, reducing the risk associated with timing the market.
Indices log biggest single-day fall in 4 years
Benchmark stock indices Sensex and Nifty tanked over 8% intraday and settled 6% lower on Tuesday. The Sensex reversed Monday’s sharp gains by nosediving over 6,200 points intraday. The index finally settled the session nearly 4,400 points lower, recovering around 1,800
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