This website including the ‘[EduFund]’ platform is owned, operated and maintained by Helena Edtech Private Limited, a company incorporated under the laws of India. The platform and the services thereunder are provided on an "as is" basis. Use of the service and the platform is at your own risk. Company makes no warranty that the use of the service and the platform will be continuous, uninterrupted, bug-free, error-free, virus-free, free of defects, free of technical problems, nor that it will meet all of your needs. To the extent permitted by applicable law, Company expressly disclaims all other warranties, conditions, results, guarantees, or representations with respect to the service and the platform, whether express or implied, including, but not limited to, the implied warranties of merchantability, merchantable or satisfactory quality, fitness for a particular purpose, non-infringement of third party rights, or arising from the course of performance, course of dealing, or usage of trade.
Investment in securities market are subject to market risks, read all the related documents carefully before investing. The valuation of securities may increase or decrease depending on the factors affecting the securities market.
EduFund and the EduFund App are the brand and product of Helena Edtech Private Limited
“An affiliate of the Company, i.e. Samyama Advisors Private Limited, is registered with the Securities and Exchange Board of India (SEBI) as an investment adviser under the SEBI (Investment Advisers) Regulations, 2013 bearing the registration number [INA000015321]. Samyama Advisors Private Limited may provide investment advice to the clients through the Company's platform.”
Registered Address: 30, Omkar House, Near Swastik Char Rasta, Navrangpura, Ahmedabad Gujarat, India – 380009
Transaction Platform Partner : BSE Star MF (with Member code-51573). CIN No: U67100GJ2020PTC112589. RIA Number: INA000015321 GST No: 24AAFCH2122L1ZU
Please scan QR code to download the EduFund app
What does the current market volatility say about your investments?
Nifty50 is one of the two leading stock indices used in India. The recent volatility in the market has caused a wave of shock amongst investors and traders. This article will address what has caused the recent market volatility, and how you can deal with the same with a few tricks.
Reasons for the tank in the markets
The bearish view tightened its grip on the Indian equity markets on 13th June, as inflation concerns and fears of aggressive interest rate hikes by the US Fed spooked investors. Nifty tanked by 2.5%, breaking below the 15800 levels, and Sensex fell by 1500 points. All sectors bled in red, with banks, metals, and realty falling the most under selling pressure.
The main reasons for this significant correction are:
Nifty Performance
The graph shows the Nifty performance from June 2021 to June 2022.
The market fell significantly, touching the floor prices during the pandemic. Post this, the market started picking up in April 2021. The market continued to stabilize till October 2021, reaching 17500 levels. But this sweet story ended when the market faced a significant fall in November 2021.
The market rebounded in January 2022. It again reversed when the market fell to extreme lows amidst the geopolitical issues between Ukraine and Russia. It faced a significant fall in February, after which it quickly recovered in March.
But since mid-March, the market started falling due to various reasons like high inflation rates, FII exit, hikes in interest rates, and escalation of the Ukraine – Russia war.
This continuous fall has led to the Nifty falling to such an extent that it reached a 0% return over one year. The dotted line on the graph shows Nifty in June 2022 at the same level as Nifty in June 2021.
What can you do as an investor?
Power of Rebalancing
One fundamental matrix many investors use is portfolio rebalancing when there is high volatility. Portfolio rebalancing is moving closer to the initially decided asset allocation strategy.
The idea behind asset allocation is to balance risk and return in your portfolio by spreading your investment among different types of assets based on the market conditions.
Let’s assume that here you have a SIP of Rs. 20,000 monthly. The asset allocation here is taken in Equity, Gold, and Debt.
A rebalanced portfolio captures the market better during upward market movement, whereas there is a lag or shortfall in the portfolio that is not rebalanced.
Moreover, even when the market returns are negative, an actively rebalanced portfolio ensures that the equity, debt, and gold allocation is done so that the portfolio still generates a positive return and efficiently captures the market volatility.
In June 2022, the percentage of Nifty returns (1 year) was 0. The monthly Nifty returns are at –4.53%. The rebalanced portfolio is at a positive level, whereas a non-rebalanced portfolio yields negative returns.
How do Advisors help you?
Investors are not required to go through the hassle of rebalancing the portfolio quarterly on their own. This is what RIAs are here for!
Registered Investment Advisors (RIAs) are certified and experienced to help you with periodical portfolio rebalancing. When your portfolio is not managed actively by an RIA, your portfolio’s asset allocation remains unchanged throughout the period unless and until you change it on your own. But when an RIA manages your account, your portfolio is rebalanced periodically based on the market requirements.
Therefore, having an experienced RIA with expertise in the market makes your life easier and ensures that the portfolio volatility is maintained at minimum levels even with high market volatility.
Consult an expert advisor to get the right plan for you