Investment Strategy in election year

To take an investment decision itself is difficult and it becomes even more tough when we nearing elections.

General elections are due in April-May 2019 to form the 17th Lok Sabha.

With election, investors become curious about short-term volatility and how the new government will form the policies and their impact on the economy.

Whether we had new government or re-elections, stock market has always revived in 6-8 months in last 27 years. Since last 34 years despite any government, average GDP has shown a growth of 6.2 percent.

Whether crude price goes up, rupee depreciates or election results are not as expected, there could be a temporary fall or rise in sentiments in short term, but in the long-term investors need not worry.

Below is the trend of election year and corresponding market effect in the past years.

Election and Sensex

*Data provided by IDFC Mutual fund

History shows someone who had invested 6 months prior to the elections, would have gained positive returns of approximately 23 percent in the next 2 years.

Equities deliver steller returns during changes in the Central Government

 

*Table Source Sanctum Wealth

So, what next?

Stop thinking about it or discussing it with your friends. It is time to talk to your financial adviser and take a few steps for wealth creation. Market will not wait for you!

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