The stock market has been on a steady decline for over a month now, with a drop of nearly 10%. The Sensex has fallen from 85,000 to 77,580. This decline is primarily due to heavy selling by foreign institutional investors (FIIs), which caused a 10% drop from its peak on September 27.
Deepak Jain, the President and Head of Sales at Edelweiss Mutual Fund, emphasizes the potential benefits of adopting certain investment strategies during this market downturn. He suggests that investing through Systematic Investment Plans (SIPs), Systematic Transfer Plans (STPs), and making lump-sum purchases during significant market drops can yield profitable returns.The recent increase in equity mutual fund investments during this volatile period indicates a strategic shift among investors.By leveraging opportunities arising from the market decline through SIPs, STPs, and lump-sum investments, individuals can navigate the uncertainties of financial markets more effectively by diversifying their investment portfolios.As investors gain more experience and seek new avenues, the mutual fund investment landscape continues to evolve, promising potential benefits even amid challenges.
Market experts believe that there is currently no expectation for a quick recovery in the market’s poor performance. Experts like CLSA’s Lawrence Balenco foresee this decline continuing, possibly lasting until the first quarter of 2025.
Jay Bala from CashTheChaos.com predicts that the Nifty might reach 21,300 by the end of the year. He has forecasted a drop in the banking index, expecting it to approach 42,000, although it may temporarily stall around 49,000 and 47,000 points.This decline has led analysts to advise investors to stay away from investing in the market for now. They estimate that the Nifty could potentially fall to 21,300, down from its current level of 23,532. Since September, FIIs have sold off 1.2 lakh crore rupees worth of stocks. Additionally, disappointing earnings for the second quarter have contributed to this selling trend.
Amidst all these declines, investors should consider safer investment options. Suitable choices include Post Office schemes, mutual funds, index funds, bonds, and gold—where investors can invest while keeping risks in mind.Despite the ongoing decline in the stock market, there has been an unprecedented surge in equity mutual fund investments in October, with net investment increasing by 22%, reaching an all-time high. This influx reflects a strategic shift among investors who see market volatility as an opportunity for significant lump-sum investments in equity mutual funds.The mutual fund industry body, AMFI, revealed that during this period, an astonishing 25,323 crore rupees were invested through Systematic Investment Plans (SIPs), along with 4,047 crore rupees allocated to new fund offers (NFOs).
