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Business News/ Markets / 5 dos and don’ts of investing in the current volatile market

5 dos and don’ts of investing in the current volatile market

The inheritance of the stock market, the volatility, brings chaos among the investors, as many investors show a willingness to invest in the same but are still confused by looking at harsh markets. In this article, we will guide you with some dos and don'ts for walking down the investing path smoothly.

FILE PHOTO: A man looks at a screen displaying news of markets update inside the Bombay Stock Exchange (BSE) building in Mumbai, India June 20, 2016. REUTERS/Danish Siddiqui (REUTERS)Premium
FILE PHOTO: A man looks at a screen displaying news of markets update inside the Bombay Stock Exchange (BSE) building in Mumbai, India June 20, 2016. REUTERS/Danish Siddiqui (REUTERS)

Since market volatility somehow becomes a universal truth. You cannot escape its downtrends and upturns during the course of investing. The reason for such a volatile market could be domestic or international factors. For two years, Indian equities have been affected by the Russia-Ukraine war, pandemic, and not the prevailing inflation rates, or we can say the recessional situation of the world is ruining the markets.

However, financial analysts and experts believe that India will not suffer inconsolably. In comparison to other countries, Indian markets are the only markets that have given an overall positive return amid the September quarter, while other countries have given a harsh negative return to their investors.

As an investor, there are various confusions regarding the investment strategy, especially in the case of new and short-term investors. Well, starting any good cause action doesn't need the right time or place. It just has to be started (after having sufficient knowledge or by taking the help of those who have knowledge). Now, the main question that bothers investors is: whether to invest in such a volatile market situation or not? In short, the answer is it depends.

READ MORE: Should you rebalance your portfolio when the market is this volatile? We ask experts

Elaboratively, it totally depends on your risk appetite, as the stock market is volatile and will always be, it might change its frequency and quantitative moments, but it will never be a straight line curve aligning with the expected growth rates.

If you are willing to take the risk, you can surely invest in a volatile market. However, there are various tips, tricks, and strategies that will help you lower down the chances of losses and maximise the probability of getting positive and expected returns.

All you have to do is follow the do's and don'ts of the stock market strictly, as 98% of the investors lost their money within two years of investing just because of the implementation of the wrong strategy.

Commonly said: don't put all of your eggs in one basket

It is very truly said that if you put all of your eggs in one basket, any harm in that basket will break all of your eggs. Similarly, if you park all of your investment in a single financial instrument, small damage to such will make you lose all your money.

For such a purpose, you have to find out the potential growth in different sectors and park your money in different sectors and in different financial instruments to maximise your returns. Growth in one industry will help you in setting off the damage of another's losses.

Stick to your financial goal

The best way to invest is investing with a purpose. When you have a purpose of investing for a particular period of time, stay invested until you accomplish your financial objective from such an investment.

Sticking with an investment avenue helps you in surpassing the time of volatility and restricts you from making bad investment decisions.

READ MORE: Should a newbie begin investment journey in this volatile market?

Grab the opportunity

Act like a smart trader, and grab the opportunity to invest in the companies that contain potentially high growth but are now trading negatively because of adverse stock market conditions. You can invest in those types of stocks as they will recover their places and even start to boom the sector as growth takes place.

Don't take influenced decisions

If someone's investment strategy works well for themselves, it doesn't mean it will work for you as well. Everyone's personal economic conditions and corresponding financial objectives are unique. You have to make investment decisions according to yours only.

Your risk appetite, number of dependents, financial background, age, and financial objective decides the investment strategy you need to follow. Influenced decisions might lead you toward non-accomplishment of your goal.

Don’t take emotional decisions

In uncertain times, it's normal to feel anxious or afraid, and when the markets are booming, it's normal to feel overconfident or even greedy. However, emotions frequently lead us to act against our better judgement.

History has shown us that the market's finest days frequently coincide with its worst days, and that investors can lose a lot of money by staying out of the market. The most successful investors are frequently those who are able to entirely divorce their decision-making process from their emotions.

By concluding the scenario, we can say that markets are typically a derivative of a company's or industry's fundamentals. Therefore, over the course of a long-term investment trip, market timing will not offer any additional value if the fundamentals are sound. If you are willing to start long-term investing, all you need to care about is a bit of entry timing. Volatility won't affect you until you have to sell your investment sp frequently.

Anushka Trivedi is a freelance financial content writer. She can be reached at

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Published: 07 Oct 2022, 03:30 PM IST
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