New Shocks, Old Lessons: How to Steer Through Market Volatility

Given the recent geopolitical turmoil, the market has seen volatility, causing confusion and fear among the investors. Here are some common mistakes and how to avoid them in such swings

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Stock markets are known for their resilience, but they can still get rattled by a shift in sentiment.

Take the recent months, for instance: Indian equities have seen sharp ups and downs, first shaken by domestic worries over sky-high valuations, and then jolted again when US President Donald Trump ramped up tariff threats—triggering anxiety among investors worldwide. To put things in perspective, since hitting its peak in September 2024, the Nifty 50 erased over $1 trillion of investor wealth in April, though there was a recovery after the tariff pause. Anyhow, market volatility continues.

While many investors panicked and rushed to exit earlier in the month, some savvy investors paused, using this uncertainty as an opportunity to reflect and recalibrate. In volatile markets, how you respond often matters more than the turbulence itself. Here are five common mistakes investors tend to make in uncertain times and how you can steer clear of them.

Mistake 1: NOT REBALANCING THE PORTFOLIO

Different asset classes such as stocks, bonds, gold/silver, infrastructure investment trusts, and real estate investment trusts, grow at different rates. If stocks rise faster, they take up a bigger share of your portfolio. If they fall, the balance tilts the other way.

Rebalancing helps adjusting your investments to bring them back to their target mix. It ensures you don't take too much risk when stocks are high or miss opportunities when they are low. A well-maintained asset allocation helps you stay in control during market swings. Regular rebalancing ensures that your investments work for you, not against you.

How To Rebalance Smartly?