From war to wealth: Lessons for investors in volatile times

The ongoing US-Israel war with Iran has begun to hit home, and markets are reacting with visible nervousness.

Rising crude oil prices and a choke on gas supply are bad news for energy-importing countries, like India. Such shocks can fuel inflation, weaken the rupee and squeeze corporate profits—and that anxiety is already visible in the markets.

The fear of Friday the 13th played out rather dramatically in the stock market as the Nifty 50 fell nearly 488 points, taking its decline to around 8% since the start of the war.

Market volatility, however, is precisely when investors need to stay grounded and double down on a long-term approach. Maintain a diversified portfolio and continue your SIPs. It may also be a good time to review your emergency corpus to ensure adequate liquidity—but avoid knee-jerk reactions.

In this superb story, Jash Kriplani examines past geopolitical events and how markets responded, bringing home a key lesson: over the long run, disruptions tend to reward investors who stay invested.

On the same theme, Shyam Sekhar, founder of financial consulting firm ithought, has an excellent piece on how war pushes the negative forces of uncertainty and volatility higher while pushing valuations lower.

With no visible end to the conflict and oil supply risks looming, volatility is rising and valuations are compressing across sectors. Yet this is precisely the kind of environment in which long-term opportunities begin to emerge.

Read this column to understand why every investor today is sitting on a potential opportunity to ride the upside that often follows a crisis. Yet only a few manage to capture it.

The difference often comes down to how one responds during periods of panic, says Sekhar.

Multi-asset funds gaining traction

Other than nudging you to maintain your calm in these uncertain times, Jash Kriplani has another interesting piece on the growing popularity of multi-asset funds (MAFs).

As the name suggests, these mutual funds invest across multiple asset categories such as equities, debt and commodities like gold, making them increasingly attractive in volatile markets.

Given their rising popularity, asset management companies have started launching multi-asset fund-of-funds, which have the added advantage of investing in MAF schemes of other AMCs, giving diversification a multi-manager approach.

For the average investor, sticking to a regular MAF is good enough. This story explains why.

Continuing on the same theme, Shipra Singh spoke with Deepak Shenoy, chief executive officer, Capitalmind AMC, to understand how these funds work, who they are best suited for, and whether investors risk chasing yet another market fad.

Read the interview here.

This week, Mint Money also reported on two important issues concerning women and financial independence.

One story examined how social conditioning and long-standing norms have often left women financially disadvantaged. Many still hesitate to participate in family discussions around succession planning or to claim their rightful share of their parents’ hard-earned money or ancestral property.

Legally, the situation changed in 2005, when the Hindu Succession Act was amended to grant daughters the same rights as sons in ancestral property. The law applies to Hindus, Buddhists, Jains and Sikhs.

In this story, Shefali Anand explains why it is crucial for women to understand these legal provisions, assert their rights, and seek legal assistance when necessary to claim their inheritance.

Another important story looks at the growing trend among urban working women delaying motherhood.

Advances such as egg freezing and in vitro fertilization (IVF) have made it possible for women to extend their biological clock—but these options come at a significant cost.

In this story, Shipra Singh breaks down the expenses involved and explains how women considering these options can financially prepare for them.

Finally, in the spending space, Ananya Grover walks us through the math of renting versus buying household items such as furniture and appliances.

For short-term stays, both the numbers and the convenience strongly favour renting and also when sharing a flat. Over the long term, however, the balance gradually shifts towards buying.

For urban professionals who frequently move cities, this story explains how the numbers work and highlights the hidden costs of renting—such as service fees, delivery charges, insurance and early termination penalties.

That’s all from the Mint Money team for this week. Until next time!

Send in your feedback, story ideas, queries at deepti.bhaskaran@livemint.com.