Leader Speak– Jan 2023

We continue to live in these times of geopolitical, economic and climate uncertainties, yet India continues to be a bright spot of growth in the leading world economies. The Union Budget has been cognizant of the challenges and opportunities of the present times and has continued with its growth driving agendas like increased thrust on infrastructure budgetary outlay while also keeping an eye on fiscal prudence. The government has reaffirmed its commitment to reducing fiscal deficit, which should limit the risk of a further sharp increase in interest rates. Our markets remain volatile but the global decline in crude oil prices provides a welcome relief – it’s a mixed world.

So how would you want to go about your investments in such times?

Our recommendation for uncertain times like these has always been “stick to the basics.”

Setting your financial goals - Hope you have clearly defined your short term and long-term financial goals, which will give you a road map for how much you may need to save monthly /quarterly/yearly to achieve those goals. Assess for yourself how much you want to save, let’s say for your next mobile upgrade or vacation to how much you want as a corpus for your retirement.

Make informed decisions when doing your asset allocation.

Asset Allocation is an investment strategy that aims at investing in different asset classes that help in balancing the risk and returns in a portfolio in accordance with the investor’s goals, risk tolerance and investment horizon. Hence, basis your financial goals, your asset allocation can range from bank deposits, stocks, bonds, mutual funds, PPF, real estate, commodities, gold etc. We encourage all to either be informed through the internet or take the help of your financial advisor to understand the financial instruments well before allocating your funds.

Go the SIP way.

Systematic Investment Plan (SIP) is the most recommended and now popular modes of investing regularly into the equity markets through the mutual fund route. It inculcates the discipline of saving regularly and also takes advantage of staying invested in the markets over a long horizon which enables one to average out the risk and return on investments through the ups and downs of the market.

Asset Allocation changes with time and needs to be reviewed.

While asset allocation, once done, reduces the need in a portfolio from daily monitoring, it does not mean that one does a one-time asset allocation and then just forgets about it. It is always advisable to review your portfolio either with your financial advisor or personally at regular intervals and may adjust your asset allocation from time to time to ensure you meet your financial goals.

Do not make panic decisions because the markets are volatile.

We have seen many investors incur losses as they panic and withdraw when the markets go down. Financial goals setting with the appropriate asset allocation must be made with the understanding that there will be different cycles in the markets. You can also now access many historical data points where the markets have gone down and thereafter the recovery that has happened and the advantages that many investors have got as they have stayed on invested over multiple cycles.

We believe that moderation in global commodity prices from peak and stalemate in the geopolitical situation will provide relief to the entire world in general. India seems to be more stable, supported by improvement in domestic demand, government thrust on infrastructure and support to manufacturing. At HSBC Mutual Fund, we are strong believers in the growth story of India and we are committed to our investors through the entire journey of their life cycle.

Stay Invested, Stay Healthy and Safe!

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Source: HSBC Mutual Fund

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