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No Action is also an Action

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Till couple of years back after the Covid correction, stock markets were moving almost in one direction with some aberrations caused by geo-political conflicts of Russia-Ukraine & Israel-Hamas, elections in India and BJP not gaining majority on its own and some other such events. Despite such temporarily disturbances the markets maintained their upward movement.

Until about ten months back when it started showing concerns over possible Trump win in US elections as FIIs started withdrawing funds from Indian markets, growth in profits of listed companies also showed some pressure, concerns over high valuations, tariff war and its likely impact on world economy etc. kept stock markets on the edge across the world.

And the worst that could affect Indian economy and markets was Pahalgam terror attack forcing Indian government to launch Operation Sindoor against terrorists outfits & Pakistan. Had the government heeded to popular feelings and escalated the war, we don’t know how far it would have gone and what damage it would have inflicted on Indian economy.

All these news are supposed to be quite disturbing and adversely impacting investors’ sentiments. Between September 2024 & March 2025 broad markets came down by over 18% from their peaks  before rising again by about 15% from the recent lows in March but are still down by about 5% from their peaks.

A seasoned investor who has spent about five years or more in stock markets directly or indirectly knows well that “Volatility is an integral part of the stock markets.” Periodically markets get exposed to deep corrections of 10% or even more but in the long run they have to rise.  And there are many comforting factors to substantiate this statement of Indian economy and markets going up.

Despite all the geo-political conflicts, tariff war etc. Indian economy is still among the fastest growing economy in the world. Inflation has come down to below 3.5%, RBI has also decreased interest rates by 1% and growth in net profits of listed companies is also in double digits. GST collection is at all time high, increasing every month and domestic flows of funds especially through SIPs have remained high. Current Nifty PE of 22.22 is well below its five year’s average of 24.82.

All these factors have not only helped Indian stock markets recover faster but also keeping them steady despite pressure from FIIs/FPIs. And markets are expected to remain so for quite some time.

Considering the way India established its authority over Pakistan in strategic warfare, strong government ensuring continuity of policy, strong internal consumption theory, growing economic influence forcing Canada to invite Indian PM for G7 summit despite the strained relationship between the two countries and strong domestic inflows forcing FIIs to come back – have positively impacted markets.

So markets are likely to remain range bound testing the patience of investors. During such period No Action is also an Action. These are the times to evaluate your asset allocation, rebalance your portfolios. These are the times where SIP gives the best results.

Geo political tensions and tariff war sent gold prices very high in last about six months. Many investors are feeling left out of this potential gain. You would recall that over last about one and a half years, at InvestmentMitra we had been advising some investments in Multi Asset Funds that invest in gold also. Should you wish to invest in only gold as an asset class then mutual funds offers the best option. Another option you can explore to invest through an online platform who has tied up with a PSU refiner and gives you an option to either receive money or gold coins or gold jewellery of their brand whenever you wish to withdraw your investments.

So as of now not much action is needed except portfolio rebalancing depending upon your asset allocation. So review your portfolio with your InvestmentMitra to find out any action plan or contact us for any suggestion on your existing investments or your personal finance.

Happy Investing!

Team InvestmentMitra

 

 

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