With general elections in six months, India’s economy and fi nancial markets are witnessing a volatile trend. A key

reason for that is the uncertainty of the future outcome. As an ordinary investor, you may consider holding back your investments. You clearly perceive more risks due to volatility. In a bid to not take the risk, you may miss out on a bargain.

What is Risk?Investments and risk go hand in hand. You might be thinking that Fixed Deposits (FDs), Real Estate and Gold are risk-free investments. This is not true. In FD, your money is prone to a default risk. Further, returns from FD cannot beat infl ation. In Real

Estate investment, you don’t have Liquidity. Thus, you face Liquidity risk. Gold investments also face Liquidity risk. Besides this, Gold rates have been fl at for a long period of time.To get returns that beat infl ation, you need to take a little more risk. A risk is not always a bad thing. As an investor, you can benefi t from your ability to take risks.

How you can benefit from risk?● In Mutual Fund investments, you get to choose your

own risk. You should know your risk appetite. There are different Funds available for different risk levels. You can invest in low-risk Debt Funds. You can also invest in Equity Funds if you are willing to take more risk.

● You can refer to the Mutual Fund Riskometer. For each risk profi le, there are a plethora of schemes available. If you are confused with high and low risk, choose Hybrid Funds. Hybrid Funds come with moderate risk.

RISK Vs VOLATILITY

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What helps?● Investing in Systematic Investment Plan

(SIP) can help you overcome volatility. SIP can also give you good returns in the long-run. You don’t have to time the market. You can invest a pre-determined amount through different price cycles. You eventually, end up with an average cost. This cost averaging helps you manage volatility.

● You will benefi t from long-term investments. Historical data of SENSEX and NIFTY shows that in the long-run markets march forward. Fluctuations are a short-term thing. Experts always recommend Equity Funds for long-term goals. This extra time helps investors get good returns, despite volatility.

What is Volatility?Volatility simply means a rapid change in the value of shares, bonds etc. over a given period of time. High volatility indicates rapid increases and dramatic falls in the markets. Such movement in prices is attractive to traders and some investors.

WHAT NEXT?

Worried about the recent volatility. It’s not the time to push the panic button yet! Stay calm during market

volatility with tips and tricks discussed in the

next section.

1 Don’t panic!Volatility alert! Please don’t push the panic button! Don’t indulge in distress sales during this period. Volatility is not as negative for your investments as you think.

2 Set goals for every investmentSetting fi nancial goals makes it clear when you want to achieve them. Stick to their plans and re-align your investments to your goals. Have separate portfolios for

different goals.

3 Diversify your investmentsInvest in diversifi ed assets. If there is volatility in the Stock market, your Debt market investments can help you balance your portfolio. Avoid investing in just one asset class.

4 Continue with your Systematic Investment Plan (SIP)

Don’t stop your SIP when the market plunges. Stopping your SIP during market fall defeats the

core purpose of investing through the SIP route. Continue your SIP to reap

long-term benefi ts.

5 Continue with your financial planMarket volatility is a temporary phase. Volatility can occur many times during a given period of time. Frequently, changing your fi nancial plan is bad for your investments. It’s as bad as not having a fi nancial plan at all.

6 Invest in quality StocksThe market downswing is an opportunity to buy quality Stocks. However, don’t just bottom

fi sh. Not all Stocks available at low value are value Stocks. Check for company fundamentals and track record before investing.

7 Stay invested!Long-term investments are the key

to handsome returns. You will benefi t through the power of compounding in the long-run.

8 Seek advice from experienced

financial advisorsIt is always better to seek expert advice. Financial advisors are market experts. They can help you develop or re-align your fi nancial plans. Smart investments

can help you manage volatility.

WANT TO STAY CALM DURING VOLATILE TIMES? DO THESE 8 THINGS

experienced financial advisors

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Swatantra Kumar Explains: Fear of financial loss Fear of loss refers to a tendency to strongly prefer avoiding risk during investing. Here, investors prefer choosing low return investments. They are afraid of losing their money. The fear of loss overpowers the excitement to gain. This results in irrational investment decisions. However, not taking risk is also a type of risk. By not taking a risk, you are at a risk of not being able to meet your fi nancial goals. You are also at a risk of uncertainties eating out your savings.

You can take note of the following tips to overcome this fear:

● Set fi nancial goals before you start investing.

● Choose your investments according to your risk appetite.

● Do your research. Study the company’s profi le carefully before investing in it.

● Be a disciplined investor even during volatility. Re-align your investments when needed.

● Seek fi nancial advice. Don’t bank on other people’s opinion.

Don’t let the fear of fi nancial loss affect your investment decisions. Such fears can be dealt with through awareness about investments.

*This content was created exclusively for UTI Swatantra. Visit http://www.utiswatantra.com for more information

For more details, follow us on Twitter @utimutualfund; Email queries or suggestions: info@beswatantra.com Please mention ‘Swatantra in TT’ in subject line.

For more such fi nancial advice, head to our website: http://www.utiswatantra.com Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

In the next edition: In life, there will be times when your fi nances will be at war with you. In the next edition, we will look at how Mutual Funds can become your core defence strategy for fi ghting all your fi nancial woes.

Has your fi nancial peace gone AWOL (Absent Without Offi cial Leave)? You can get it back. Just tune into UTI Swatantra Facebook Live on 27th November, 2018 from 5:30 pm onwards and listen to our experts as they tell you how you can arm your fi nances with Mutual Funds.

Scan this QR code to calculate the amount you need to invest to achieve all the milestones you have set for yourself.

Financial advisors play a very vital role for an investor especially during volatile market situation. Though many investors believe that they can manage their fi nances on their own, most can’t. You use a professional because they have more education and experience. You know they’ll do the job right. And that gives you peace of mind. The same applies with your fi nances. Financial planners help you determine your short and long-term fi nancial goals and create a balanced plan

to meet those goals. Some people think that a fi nancial advisor’s only job is to invest money. While that is one of their responsibilities, it is not the only one.

GURU SPEAK

Shashank JalanIFA

While volatility in the broader equity markets due to intensifying global trade war concerns has led to the downside, individual investors investing in mutual

funds are concerned because of the poor performance of most funds in the last six months, especially after getting good returns in 2016 and 2017. However, experts say the equities market in the short-run tends to be volatile, but long-term return potential remains high. Every investor needs to know the purpose of investing and have a time-frame for his goal. Allocate funds in equity if the requirement of funds is after more than fi ve years. For short-term liquidity, the investor can invest in debt funds.

HERE’S WHAT THE EXPERT SAID

A reader asked us: As stock markets experience volatility, should we turn to debt markets?

EXPERT SPEAK

Rusi Shapurji BhatheraIFA

What role do fi nancial advisors play when markets tumble? *This content was created exclusively for UTI Swatantra. Visit http://www.utiswatantra.com for more information

It is never too late to benefi t through long-term compounding and cost-averaging; start today!SIP HELPS YOU SAIL THROUGH MARKET VOLATILITY!