Retail investors prefer SIPS, Gold amid global turmoil

Indian market pulse

• Cumulative demats stood at 3.6cr as on March 2019

• Marked 7.7cr as on Nov 2021

• NSE-50 index rose nearly 125% since April 2020

• NSE-50 index crossed the 18000 mark Oct 2021

Kolkata: Retail investors may start making small investments or SIPS and not invest all their capital at one go as the Indian stock market may remain volatile till the Russia-Ukraine conflict and geopolitical tensions are not over, a market expert said on Tuesday.

The Indian stock market indices have been highly volatile in line with global markets and the Nifty 50 and Sensex has fallen 3.1 per cent and 3 per cent since Russia invaded Ukraine.

"Due to this fall in the Indian stock markets many retail investors, especially those who are novices and have just started investing are panicking. But we should remember that this is a short-lived event and retail investors should take this as an opportunity to buy on SIPS. Retail inestors may start making small investments or SIPS and not invest all their capital in one go as the Indian stock market may remain volatile till this war and geopolitical tensions are not over," Vivek Bajaj, Co-founder of StockEdge and Elearnmarkets.

The cumulative demat accounts which stood at 3.6 crore as on March 2019, was 7.7 crore at the end of November 2021 and mostly the young population had jumped into the investment bandwagon. The NSE-50 index rose nearly 125 per cent since April 2020 to peak in October 2021 and crossed the 18000 mark before going through a correction. "Since the stocks are falling due to the geopolitical crisis, retail investors can invest in alternative vehicles such as gold, which is considered safe haven bullion. Gold has a negative relationship with the stock market i.e when its indices fall the price of gold rises. On Tuesday, the price of gold rose to its all-time high. Gold is considered as a hedging tool against inflation and geopolitical tensions," Bajaj said.

"With Brent crude futures hovering around $100, a new seven-year high as energy export can be disrupted due to the invasion of Ukraine by Russia. However, the primary trend of Indian stock markets is bullish and this slide is just a correction due to the geopolitical crises. So, the retail investors should remain bullish and consider this an opportunity to buy value stocks for long term investment," he said. Many brokerage houses are advising clients to gradually build on their selected stocks in small lots as the long term India growth story remains intact.