Indian Market has huge potential in coming times to fulfill financial goals of investors what’s needed is to craft & pursue them in professional manner with minimum risk.
Now-a-days everybody is talking about Stock Market or Mutual Funds. People are investing in Mutual Funds just by seeing Star ratings in Newspapers & Magazines. Fact is every Mutual funds option is not suitable for every investor. Mutual Funds mustn’t be taken as free size outfits. Right now every month more than Rs.7200 Crore is going to stock Market through SIP’s (Systematic Investment Plan). Debates have been started to assess the scope of limiting equity exposure of individual investors based on their net worth. In future individual investor’s equity exposure will be capped based on her Net worth.
India’s Mutual Fund Space
However, India’s Mutual Fund AUM penetration as 11% of GDP is still very low compared to the Global Average of 62%. Hence there is a huge opportunity to make returns. But it does not mean to invest blindly as the question is whether there is adequate space in Indian Stock Market to digest even 50% of GDP.
India’s Mutual Fund Market Dynamics
Sensex already touched 38700 & 40000 is not very far. On the other hand Crude oil prices are rising. Indian Rupee is making new lows against US Dollar and running above 70/$. There is a major sell off in small caps stocks though Sensex is rising. No doubt one of the major reasons for Sensex rising is heavily participation of retail investors into Equity.
On the other hand Problem is many novice investors are entering in market. People are losing money due to lack of knowledge & proper advice. They are investing just by discussing with friends, families & information on public platforms.
Importance of Asset Allocation
Asset allocation plays a very important & major role to have adequate risk adjusted returns. Asset allocation means how much portion should be invested in Equity, Fixed Income, Gold, Real Estate & other Investment avenues. There are number of factors like Investment objectives, Our Goals, Remaining number of Years to fulfill that Goal, Income, Liabilities etc. to ascertain Asset allocation. So personalized asset allocation is mandatory.
It is high time for investors to seek expert advice for customized & consolidated Investment & Risk Planning from Authorized Advisors to have a sensible returns and peaceful achievement of financial goals.