CEO Speak August 2023

Keys to successful investing:

I get asked these questions all the time by investors, funnily, irrespective of the market cycles. So, this time I am trying to list down some common dilemmas and my two bits on tackling them.

What is a good time to invest into the equity markets?

Timing the equity markets can be challenging, and even the most experienced investors can get it wrong. As a retail investor, your best approach is to focus on your long-term financial goals, build a diversified portfolio, and avoid making emotional decisions. By staying informed, using strategies like rupee-cost averaging (SIPs), and seeking professional advice when needed, you can navigate the equity markets with confidence and increase your chances of achieving your financial objectives. Remember that patience and discipline are often the keys to successful investing.

A common saying in the markets is “Time in the market is more important than timing in the markets”. I strongly stand by it.

Is it a good time to sell my equity funds?

3 critical points to remember before selling equity funds:

Investment objectives: Never lose sight of why you had invested in the first place. Was your investment objective to save funds to buy a house, a child’s education or retirement? My advice to all investors who are nearing their original goal of investment is to look at systematically withdrawing and transferring such funds into a non - equity and liquid instrument. Other than that, one must not get affected by market ups and downs and make knee jerk reactions of withdrawing or stopping their SIPs.

Reached the desired corpus: Mutual funds and SIP are great tools for wealth creation. If you have reached the desired corpus, it may make sense to book profits or rebalance your portfolio. Remember greed is a cardinal sin!

Unfortunate emergency: The only other reason where I think investors may get forced to liquidate their investments is in case of an emergency. To that, my advice is to always keep funds earmarked for at least 3-6 months of your monthly expenditure always in liquid funds or banks to meet such exigencies so that it would not require you to touch an ongoing planned investment. Alternately, one also has the option of a loan against securities where one can opt for an overdraft limit against mutual funds that serves as a tool for short-term low-cost fund requirements.

My top 5 golden rules to successful investing …

1. Clear financial goals – This should be your starting point for any investment decision.

2. Asset allocation – Select instruments basis your risk appetite, tenure of investment and diversify accordingly.

3. Regular portfolio review - It is a good hygiene practice to review your portfolio from time to time as life goals change and so does market conditions. If rebalancing is needed, go for it.

4. Invest regularly – SIPs are a great way to create opportunities for wealth creation and ensure investing discipline.

5. Stay informed and seek professional advice – In today’s day and age of information, take out time to read and understand your investments. Seeking help from professionals and qualified advisors is a prudent way to manage your investments.

As we keep reaching milestones in our corporate journey along with the milestones of the markets, our fund management philosophy and everyone in the HSBC AMC team is committed to bring the best of products, processes, platforms and services to our investors. Our objective is to provide customers enhanced suite of products for their investment needs, ably supported by digital service platforms. Our belief in the India growth story stays strong and we are committed more than ever to bring in the best to our domestic and overseas customers.

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