SIP BY SIP IN 2025

Investors should opt to build a diversified equity portfolio comprising stocks of companies with strong fundamentals

- RADHIKA GUPTA

WHEN THE STOCK market turns volatile, many investors find it difficult to hold on to their investments. A few investors pause their systematic investments. The mind is designed to avoid loss, and many investors find it difficult to digest even marked-to-market loss due to falling stock prices. In a volatile market, investing becomes tougher. Investors, however, can use volatility to their advantage. Here are a few practical lessons:

No Panic Decisions

Securities markets tend to go through rough phases. Investors should be mentally prepared for such a phase. Falling stock prices and the resulting downward-trending net asset values of the mutual fund schemes are no aberration. It has happened in the past and will happen in the future. When volatility strikes, avoid selling in a panic. Instead, take stock of the situation by figuring out two things: the risk-reward associated with the portfolio the investor holds and the risk-taking ability of the investor.