Is it time to invest in the markets right now? This is probably one of the most frequently asked questions by investors right now but very few would have the answer.
In the last few decades, there have been several market trends and pandemics that had people wondering if they should throw in the towel: Starting from the SARS outbreak between January and March 2003, the EBOLA outbreak between December 2013 – January 2014, ZIKA virus crises from November 2015 to February 2016, to the current COVID-19 health crises to name a few.
Vivek Jain, Investment, Business Unit Head, Policybazaar.com said, “During all these situations, investors have never sold out of their positions, despite being continuous anxious. We all have done enough market research at our levels throughout these times as for most of us it comes down to the sleep factor: can we sleep at night given the market volatility?”
Whenever, there Is a Pandemic, the market rebound has been very strong.
It is believed that this is probably a good time to invest given one have a limited horizon and a reasonable tolerance for risk. These are volatile times and during such times the markets have gone too high too fast from their current lows. At least this is what the previous pandemics and market lows show. During the SARS outbreak, the Sensex had fallen by 10 per cent but it went up by nearly 84 per cent within 1 year, and during the EBOLA outbreak, the market fell by 3 per cent but within 1 year the market went up by 42.5 per cent.
Similarly, during the ZIKA crises, the markets had fallen by 12 per cent however, within a year the market climbed up by 24 per cent.
The statistics rightly prove that whenever there has been a pandemic and the market has fallen down, the rebound has been massive and much stronger. Even during the ongoing corona crises, the Sensex which was hovering at 26,000 points during the month of march has successfully managed to climb back to 31,000 points by the month of May. Therefore, it may be correct to say that events like these are right time to invest your money in equity markets either directly or through ULIPs and mutual funds.
Investing your money while prices are down can be a smart move, so that you can get good returns when prices rise. One of the best available options to invest in amidst the current market situation is Capital Guarantee Solution plans – a combination of ULIP and Traditional Products.