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Advocating for a Sustainable Strategy in an Overheated Market

Investors Show Interest in Buying on Dips Despite Market Volatility

Mutual fund houses witnessed a surge in inflows on June 4, despite the market downturn, indicating a shift in Indian investors’ focus towards long-term investment strategies. This trend also reflects investors’ willingness to take risks and buy on dips.

According to Dhirendra Kumar, founder and CEO of Value Research, buying the dip requires courage rather than just financial ability. He emphasized the importance of appreciating the risk taken when making profitable deals during market downturns.

While the markets have been hitting record highs, with Nifty reaching a peak of 24,401, Kumar cautioned against relying solely on buying dips as a sustainable investment strategy. He advised investors to maintain liquidity for tactical investments but prioritize a diversified portfolio for long-term growth.

Kumar highlighted the risks associated with investing solely in sectoral and thematic funds, which may perform well in the short term but could falter in the future. He stressed the importance of diversification to navigate through market cycles successfully.

Despite the influx of investments in concentrated sectors, Kumar advocated for a balanced portfolio that can withstand market fluctuations. He recommended systematic investment plans in equities for long-term wealth creation.

The net inflow into SIPs has remained steady, indicating a neutral stance among investors. Kumar suggested that some investors may be booking profits or shifting investments to new fund offers, rather than withdrawing from the industry altogether.

In conclusion, Kumar urged investors to stay invested, save more, and increase their investments as their income grows. By adopting a disciplined approach to investing, individuals can build a resilient portfolio for long-term financial success.


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