What should long-term investors do in the current market?

Stock market today: The Indian benchmark indices fell on Friday (April 19), in the morning deals where S&P BSE Sensex plunged over 600 points and NSE Nifty traded near 21,850 levels, however, it recovered in the afternoon trade.

Also Read: FIRST TRADE: Sensex slips over 600 pts, Nifty below 21,850; here's what is dragging the indices

Amid a volatile market session, what should long-term investors do?

Diwakar Rana - Senior Equity Research Analyst - Prudent Equity suggested investors to be patient and invest for the long term. He recommended parking one's money in companies with low price-to-earnings PE multiples.

"Investors can bet on company-specific growth triggers instead of going for companies with industry tailwinds. It would be best to concentrate on companies with low PE multiples and that is projected to grow at a rate of 15 per cent to 20 per cent," said Rana.

Rana reckoned volatility in markets as an excellent opportunity to enter such companies.

Further, he warned that amid instability in the Middle East, a short-term trading and investing horizon could be detrimental to the portfolio.

Anirudh Garg, Partner and Fund Manager at Invasset also suggested adopting a minimum two-year investment horizon in the current market situation.

Moreover, Garg sees this situation as an entry point for new investors. 

"We're concluding a downturn cycle, an observation backed by historical data and our experiences with geopolitical events like wars, which often create favourable investment opportunities," said Garg. 

Tanvi Kanchan, Head - UAE Business & Strategy, Anand Rathi Shares, and Stock Brokers suggested investing in funds from diversified categories.

"Large caps have given over 20 per cent returns while small and mid-caps have given more than 50 per cent returns in the past year. Investors should consider investing in funds from diversified categories while maintaining a market cap allocation of more than 50 per cent in large-cap and remaining in mid-cap and small-cap. An equity saving scheme fund can also be assessed to park a certain portion of their short-term money," said Kanchan. 

Outlook 

Giving a broader perspective Invasset's Garg said, any positive developments around election times should be viewed as opportunities for profit-taking. 

Triggers to look out for as per Anand Rathi's Kanchan:

>>Q4 results.

>> General Elections. 

>> Israel-Iran rising conflict. 

>> Domestic and global economic macroeconomic data.

>>Crude oil prices, and precious metal prices.

Giving an outlook on the broader, Kanchan said that they may see some time correction in certain pockets in the near term, however, the long-term story of the broader market continues to remain attractive.

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