Use The Volatility To Your Advantage

nvestors with investible money are in a Catch 22 situation. On one hand, the rising inflation is making regular saving options a losing proposition while on the other, investing in equity markets is being fraught with high volatility. While sounding repetitive, it is important to remind our readers that equity remains a time-tested asset class that has beaten inflation in the long run time and again.

Considering the global geopolitical situation and the hara-kiri it is creating in the raw material prices, one must appreciate the resilience that equity markets all over the world have shown. It just goes to show the forward-looking nature of the equity markets which tends to oversee the short-term obstacles with a longer-term perspective in view. This edition is a special issue where we bring to you a plethora of information on the large-cap stocks for your perusal and decision-making. In this large-cap-dedicated issue we talk about the advantages of investing in large-cap stocks and highlight what strategy needs to be adopted in CY 2022 to beat the markets.

In our special story we have discussed why it makes sense to use the current ‘high market volatility’ to make some money. By selling volatility one can surely take advantage of the current market situation. However, what is selling volatility and how can one deal with it profitably? This exactly is what you will find out in our special report. Do share your feedback with us.

Meanwhile, it appears that the government is willing to support the ethanol producers and hence sugar stocks are likely to remain in the limelight throughout the year. Stocks of renewable energy sector too may not disappoint in CY 2022 owing to the sharp rise in crude oil prices. Despite the headwinds and the uncertain geopolitical situation, the markets are not to be feared. That said, investors and momentum traders should refrain from taking any aggressive stand for the moment simply because the picture is still hazy in spite of having most of the negatives already discounted.

The market is already pricing in higher crude oil, above average raw material prices and several rate increases that are expected through the year. Thus, for the markets to further go down sharply there will have to be a fresh contingent trigger, failing which the markets should recover steadily. Tighten your seatbelt as this volatility ride may play out longer. Do not be in haste, do not panic and just try to enjoy the experience!

RAJESH V PADODE
Managing Director & Editor