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Navigating the Volatile Market when it comes to your Investments

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November 21, 2023

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In this policy, the investment risk in investment portfolio is borne by the policyholder. 

Navigating the Volatile Market when it comes to your Investments

Investing in volatile markets can be challenging, even for seasoned investors. However, one can navigate these choppy waters effectively with the right strategies and discipline. Here are some strategies that can help:

1. Diversification:

It makes sense to diversify your investments across different asset classes like equities, bonds, real estate, etc. This will help shield your overall investments from large drawdowns and under-performance in any particular asset. Declines in one may be offset by gains in another investment.

Consider a mix of equity and debt instruments or an investment that provides multiple benefits in one instrument. Unit Linked Insurance Plans (ULIPs) like HDFC Life Smart Protect Plan provide the dual benefits of life insurance coverage and market-linked returns. They also offer flexibility to switch between different fund options based on your risk appetite. The fund options, depending on the variant chosen, include Diversified Equity Fund, Bond Fund, Discovery Fund, Equity Advantage Fund, Sustainable Equity Fund, Flexi Cap Fund, Capital Growth Fund and Capital Secure fund.

2. Rupee-cost Averaging:

Regular investing over a period of time reduces cost vis-à-vis the gains made. Continue investing a fixed amount through market highs and lows. You will accumulate more units when the price falls and buy fewer units when the price rises. This will reduce your average cost per unit.

3. Long-term Perspective:

Compounding is often called the 8th wonder of the world –– yet it needs time to show its magic. Invest with a long-term vision. A sufficiently long time horizon helps your investments ride out periods of market volatility, which are often short-lived.

4. Quality of investments:

Study and understand a financial instrument thoroughly before investing in it. Try to invest in instruments which you fully understand. Similarly, try to choose financial companies that have a proven and trustworthy track record.

5. Review and Rebalance:

Over time, some investments in your portfolio will perform better than your other investments. This is the time to review your portfolio vis-à-vis your goals. You may need to buy more of some assets, sell some of others or shift from one instrument to another. Hence, choosing an instrument that provides ample choice and flexibility without additional costs is better. HDFC Life Smart Protect Plan allows you to choose from 5 funds with the flexibility to switch between them any number of times.

6. Emotional Discipline:

When it comes to investing, your EQ (Emotional Quotient) is as important as your IQ (Intelligence Quotient). Avoid making investment decisions based on emotions. Do not buy, sell, or completely withdraw, your investments as a reaction to market volatility or other external factors. Stick to your plan and only make the necessary adjustments warranted by your goals.

7. Professional Advice:

A financial advisor is your guide on your journey towards your financial goals. They help you tailor an investment portfolio most suited to your goals and risk appetite. If you are not sure which is the most suitable one for you, it is wise to seek the help of a certified professional.  

Make Investing Easy

In today’s fast-paced life, everyone is handling multiple responsibilities. Investing should not become a chore that adds to this burden. It should be hassle-free and automated and should provide peace of mind.

Investing and protecting for your family’s future becomes easy with HDFC Life Smart Protect Plan. It offers the option of 4 plan variants: Level Cover, Level Cover with Capital Guarantee, Decreasing Cover, Decreasing Cover with Capital Guarantee. The plan also allows the switching of funds as per your changing life situations and milestones. Besides life cover, 4 kinds of loyalty additions and their Capital Guarantee (Minimum Assured Benefit) give you assured returns on your money. You also get the flexibility to choose your premium payment frequency. One may also choose to decrease their insurance cover and increase the investment component after a certain age.

Grow your Wealth with Peace of Mind

We invest money so that we, with our loved ones, may secure our future. This is why it is important to remember not to let short-term ups and downs in the market upset your plans. Remember, like most avenues of life, ‘one-size-fits-all’ does not work in investing either. Align your investment strategies with your goals, risk appetite and investment horizon. Stay updated with the latest investment news and avenues in investing. These will help you enjoy the ride towards your financial and life goals.

Related Articles:

ARN: ED/10/23/5827

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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Disclaimer

This material has been prepared for information purposes only, should not be relied on for investment, tax or any accounting advice. It is requested to seek advice of your financial advisor with respect to any investment or financial decision.

The Unit Linked Insurance Products do not offer any liquidity during the first five years of the contract. The policyholder will not be able to surrender or withdraw the monies invested in Unit Linked Insurance Products completely or partially till the end of the fifth year.

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