When indices reach record highs, what should you do next?
When indices reach record highs, what should you do next?
Today, both the Nifty and the Sensex market indexes reached new all-time highs, buoyed by the optimistic mindset of investors. While the BSE Sensex gained 486 points to end the day at 65,205.05, the Nifty followed suit and gained 133 points to end the day at 19,322.55 points.
After the 30th of June, the total aggregate market value of all of the firms that were listed on the BSE was Rs 2.96 lakh crore. At the close of trade for the day, this figure reached 2.98 million billion rupees. Because of the robustness of the market, investors made a total gain of around two hundred thousand billion rupees in a single session.
The upswing is being propelled in part by a rise in indices that are headquartered in the United States, which in turn has a positive impact on the markets in India. The results of the Federal Reserve’s stress test, which evaluates a bank’s capacity to withstand the effects of a hypothetically severe economic downturn, showed that US banks were in a strong position, putting to rest concerns about an imminent recession affecting the economy of the United States. Additional economic data, such as employment numbers that were greater than projected, contributed added fire to the boom.
In addition to this, foreign portfolio investments (commonly known as FPIs) are making significant investments in India. As of the third of July in 2023, foreign portfolio investor (FPI) inflows amounted at Rs 11,791.86 crores, extending the green streak of investments into a sixth straight month. To this day, foreign portfolio investors have contributed around Rs. 88,257 crores to the equity markets of India.
On the BSE today, the energy (+2.08%), FMCG (+1.09%), metal (+2.28%), and financial services (+1.02%) sectors performed strongly, while the information technology (-0.43%) and auto (-0.44%) sectors lagged behind. But what do these normal shifts in market price mean for you specifically?
Maintain your focus on the things you want.
You shouldn’t base your judgements on the green and red of the markets, even if they may entice you on a regular basis. Instead, you should look at other factors. The process of amassing wealth is a marathon, not a sprint; therefore, day-to-day fluctuations like this have minimal impact on your investment portfolio in the long run.
“Considering intermittent volatility,” says Veda Shifali Satsangee, founder of Funds Veda, who is located in Agra; “it would be pertinent to invest in multi asset products, aggressive hybrid categories, dynamic asset allocation products, and equity savings.”
Nevertheless, investors need to be conscious of their own risk tolerance and use a goal-oriented approach when they are making investments. When making investments, one must take precautions to ensure that they do not become overly excited as a result of short-term gains and that they stick to a sensible strategy. She makes the observation that “when we have seen good past returns, it would make sense to invest through the SIP route.”
