The recent market meltdown has done more than swallow the profitability of many global companies across the world; it has also eaten up the confidence of investors in the market and its viability. It’s after effects has witnessed a total reversal of faith as investors are eager to step away from the market, showing a complete lack of faith in even the advice of their financial planner or manager. As their financial planners try and convince them that equities are the current safest bet for long-term investments, people are reluctant to shift their loyalties, making fixed deposits the ‘hottest old thing on the block’. The demand to invest in fixed deposits, especially in public sector banks, is phenomenally high. On the other hand, some people simply prefer to sit and wait for the eggs of good fortune to hatch by maintaining liquid money with them. Financial observers and analysts have deemed this situation to be a sure shot one of panic, where people are worried to place their trust in the same place again and are squandering around for a far more reliable place to invest. Equities have almost become the ridiculed lot where no one wants to take a chance and burn their fingers again. Many investors fear that they might end up taking a home loan or a personal loan to fulfill their financial requirements in the eventuality of a wipe out of their investments in the equities sector. In such a scenario, financial planners are finding it difficult to advice their clients, as more and more people are going with their gut instinct of doing absolutely nothing with their funds.
The situation has further worsened with first-time investors who are too scared to try their hands at equities. They are afraid of equity exposure and they are too scared to look at the stock market for a period as long as 3 years. Other experienced investors who have seen the highs and lows of the stock market for quite some time feel that the market is just reaching its saturation stage and there is nothing much to panic on the same. Thus, as a precautionary measure, they have decided to keep their hands off equities for some time now. They claim that although they have made a lot of profits with equities in the stock market, they feel it is best to roll away from them for some time. Fixed Maturity Plans or FMPs are also taking a beating with the stock market.
It is important for investors to control any form of panic with respect to the market and must rather view it as a way to secure profitability in the long run. Listen to your financial planner and place your faith and belief in him as they are experienced spectators of the market. Investors need to have the maturity to understand that all asset classes undergo ups and downs and it is quite symbolic of their behavior. Although investors seek to avoid the lows of the market and try and make maximum profits during its highs, you must understand that this is not the best way to behave in the market. In order to recover your investments with the market, continue your investments in the market in a staggered manner for at least a period of 6 months. Although many may feel that the market is in quite a shaky stage now, equity investments are set to attain its profitable status of befitting long-term investments soon. Try and make investments for a minimum period of at least 5 to 6 years as they may provide a comparatively safe haven for investors against the top-turvy market conditions. Making short-term investments for a period of 2or 3 years is a big no-no keeping the current volatile market conditions in view.