As day of poll result nears, rise in market volatility making things more difficult

The country’s private wealth managers seem to be facing a dichotomy: Should they, or should they not, take the plunge into equities before the Lok Sabha election results on May 16.

The equity markets have remained buoyant for some time, hoping the final result won’t spring a negative surprise and the economy will take a recovery path under the next government. However, this has only added to doubts in the minds of wealth managers. They are divided on whether they should invest incremental flows into stocks or stick to cash till the day of the announcement of results.

“There seem to be two camps right now. There are those investors who don’t want to make incremental investments till the results are out, while there are others who continue to invest on the assumption that one of the major political parties will come to power,” says Swapnil Pawar, chief investment officer, Karvy Capital.

Besides, as the election result day approaches, an increase in market volatility is only making things more difficult for wealth managers.

“Given the volatility, our advice to investors at this point is to stay away from equities. Any new equity strategy for our clients will be considered only after May 12 when the various opinion polls start trickling in,” says Ankit Swaika, head (investment advisory & research), Religare Macquarie Wealth Management.

Some, however, remain optimistic and are asking investors not to take their feet off the pedal, as that will mean missing out on the spurt the market could see if the election outcome is positive.

For more visit: Business Standard

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