Sensex at 60!!! Expectations and Reality from the Investors.
The festive season is knocking on the door and Indian investors are already in a festive mood because the Sensex has reached maturity at 60 at the end of September 2021. The sudden capital gain before the festivals of Durga Puja and Diwali is bringing smiles to millions of India’s prospective investors. Sensex hit the benchmark of 60,000 in a surprising move from 50,000 in a span of less than a year. The investors of Mutual Funds, shares, stocks and bonds have gained a lump sum of money in such a move of Indian Sensex. Investors are perplexed right now regarding the facts whether they should wait and watch the market before the next move. Or the market will be stable to offer you a consistent return in the coming days as well.
The second wave of COVID 19 hit India so badly and the market had been greatly affected during this time. In February 2021, Sensex hit the 50,000 benchmarks that showed a ray of hope to the investors. But the market appeared to be volatile during this period of economic crisis throughout the nation. During April and May, the index was between 47,000 to 50,000. From, the end of August, the market became stable again and the index crossed the historical point of 60,000 on September 24, 2021. In the meantime, the index faced slight ups and downs and crossed the benchmark index of 60,000 once again on October 8, 2021. This proves that the market is coming out of volatility as the Indian economy starts to resume progress after the traumatic phase of the COVID 19 pandemic.
To determine if this moment is perfect for investments or not, we need to determine the basic difference between a bull market and a bear market. For clarification, a bull market happens during the time when the market is on rising for the increasing values of stocks, securities, and bonds. The bear market occurs when the market’s capital gain starts deteriorating. There is a traditional belief among the investors that a bear market is favourable for high returns whereas the bull market is a time to watch and wait. This concept is somehow true for the investors who want to invest for a long time horizon.
A bear market can be helpful for capital gain if we take some factors under consideration and strictly abide by those. When the market falls and we become hopeless seeing the degradation of our financial portfolio. But it can be the perfect time for investments because we get the stock and securities at a discounted price. It is not a wise decision to catch the bottom because we need to focus on a long term investment. Rather it is wise to fix our investment horizon and invest when the market starts to fall. A bear market might be risky too for the investors especially for the short term, investors because the market becomes volatile and we can never predict when the reverse journey is going to happen.
When investors gain capital from the bull market, they mostly think of liquidation of their savings. At the same time, investors wait for the fall again. So many investors prefer to invest in a bull market because of thinking of the post-positive return from the market. Otherwise, the bull market indicates that the market is stable and you have more chance of capital gain in future. So, a bull market is appropriate for both short and long term investors. The Sensex reaching the benchmark index of 60,000 might be a ray of hope for the investors because the market appears to be less volatile with the probability of maximum return. Hence, you can think of investments now if you can fix your investment horizons properly. If you want to gain profit from the market out of your investments in mutual funds, you can contact an AMFI registered mutual fund distributor.
