Riding the Market Waves: Strategies for Uncertain Times
R@hul Potu / 23 Jan 2025/ Categories: DSIJ_Magazine_Web, DSIJMagazine_App, Editorial, MF - Editorial, Mutual Fund
The equity markets have become a source of anxiety for many investors, as volatility continues to test their resolve. For those who started systematic investment plans (SIPs) in equity funds in 2024, it’s not uncommon to see portfolios in the red or delivering low single-digit returns. And if you waited until June for post-election clarity before investing, chances are your portfolio is struggling even more.
The equity markets have become a source of anxiety for many investors, as volatility continues to test their resolve. For those who started systematic investment plans (SIPs) in equity funds in 2024, it’s not uncommon to see portfolios in the red or delivering low single-digit returns. And if you waited until June for post-election clarity before investing, chances are your portfolio is struggling even more. [EasyDNNnews:PaidContentStart]
This turbulence can be unsettling, especially for those new to the markets. But rather than giving in to fear, this is the moment to tread cautiously and revisit your investment strategy. In this edition, our special story explores what investors can do during such challenging times, focusing on strategies like maintaining SIPs, diversifying portfolios, and rebalancing to stay on course.
Equity-Linked Savings Schemes (ELSS) have long been a favourite among investors for their dual benefits - wealth creation and tax deductions under Section 80C of the Income Tax Act. However, with the advent of the new tax regime, which eliminates Section 80C deductions, the appeal of ELSS as a tax-saving tool has diminished significantly.
The numbers tell the story. Except for the last quarter of the financial year, ELSS funds have seen an outflow as investors increasingly opt for the new tax regime. Without the tax-saving incentive, many are gravitating toward broader equity mutual funds that offer diverse strategies and themes.
Yet, ELSS funds remain competitive. Over the last five years, their annualised returns have matched those of flexi-cap funds, demonstrating their potential for long-term capital appreciation. For investors who can handle the three-year lock-in period, ELSS still represents a solid choice for building wealth over time.
Our cover story highlights five top-performing ELSS funds with varying risk-return profiles. Depending on your risk appetite, you can choose to invest in up to two of these funds to balance your portfolio. While market volatility may cause short-term discomfort, it is important to maintain a steady approach to your financial goals. Whether it’s through SIPs, diversification, or selecting investment options like ELSS, the key lies in discipline and a long-term perspective. After all, wealth creation is a marathon, not a sprint.
Shashikant Singh
Executive Editor
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