one more aspect that will impact your finance. As banks have announced to raise their interest rates, while it will benefit the depositors, borrowers will see an increase in their outflow. A 20-year floating rate loan will see a hike in tenure by 15 months to 255 months as a result of this 25 basis points hike in the rates.
What should you do?
With the recent fall in the markets, the Sensex return over the last one year has turned almost flat and the one year returns as on Friday stood at only 3.8 per cent. Investors tracking their investment value may get a feeling that they took wrong investment decision, but the decision is not necessarily a bad one unless you decide to sell your holding or redeem your units.
Historical data shows that equities have generated high returns post a period when the sentiments have been very low on markets and they are down — be it after the Harshad Mehta scam in 1992 or the period after the global financial crisis in 2008.
We are currently in one such phase. The currency has depreciated, the GDP growth numbers are on the lower side, interest rates are high and the current account deficit remains high. So even as there is no macro validation for markets to bounce back, experts feel that the numbers can’t keep deteriorating at the same pace and the price points make a case for investment.
“The market still looks to be range bound as we still don’t see low interest rate regime which is structurally good for markets. While we are at the lower end of the range, if there is further correction in the next couple of months, it would be better,” said Anup Maheshwari, head of equities and corporate strategy at DSP Blackrock Mutual Fund.
Markets have already fallen significantly and while defensive stocks too have taken a tumble, experts feel that investors can look to enter the market. While systematic investment plans should be continued and can even be increased, investors can even look to park part of their lumpsum investments into mutual