By Saurav Basu,
The market is a tricky pitch these days, inflation is the bowler who is constantly eroding your savings, and you need to score big to reach your financial goals. Navigating the market like a seasoned cricketer, using investment strategies to maintain a healthy run rate (annual returns) and secure your financial future is a key aspect for wealth creation.
Don’t get run out in a volatile market
Imagine yourself batting on a tricky pitch – the market. You clutch your bat (investment strategy) and eye the scoreboard (your financial goals). The bowler (inflation) keeps hurling fiery deliveries, eating away the value of your runs (savings). How do you maintain a healthy run rate (annual returns) to reach your target score without getting dismissed?
You need your investments to not just stay in the crease, but to outscore inflation and bring home the trophy (financial security).
Inflation: The googly you need to read
A bit of inflation is okay, keeps the economy ticking. But when it goes berserk, your runs buy less and less. That is where your investment “run rate” (how fast your money grows) becomes crucial. You need to score at a pace that beats inflation to stay ahead of the game.
Surviving the LBW call
The market right now is a spinning delivery – unpredictable and testing your technique. Interest rates are at their peak, which is good for fixed deposits but can dampen stock market returns. Geopolitical tensions and global economic uncertainties add to the swing. So, how do we navigate this maze and maximise our returns? Here is the game plan:
Diversify your batting order: Invest in different asset classes like stocks, bonds, real estate, even alternative investments like commodities. This way, if one asset class gets bowled out, others can keep your scoreboard ticking.
Maintain balanced scorecard: Regularly rebalancing your portfolio ensures you maintain the desired risk profile and run rate for your investments. Rising interest rates might make fixed income options like bonds seem like a slow scorer, but they offer predictable runs when the market is throwing bouncers.
Find your perfect run rate
The ideal run rate for your investments depends on your individual innings – your risk tolerance (how much risk you are comfortable with), how many overs you have left to play (investment horizon), and what you’re saving for (retirement target score). A young investor with a long game can afford to be more aggressive, while someone nearing retirement might want to prioritise protecting their wicket. A financial expert can help you chart your personalised investment innings and reach your financial goals smoothly (and hopefully profitably).
The writer is head, Wealth Management, Tata Capital.
Disclaimer: Views expressed are personal and do not reflect the official position or policy of Financial Express Online. Reproducing this content without permission is prohibited. Please consult your financial advisor before investing.