Regulate SIPs according to mkt behaviour to beat volatility, advises Finway FSC founder Rachit Chawla

The best way to beat the volatility is to change your SIPs according to the market behaviour. When you feel the market is high, you can reduce the SIPs; and when you feel the market is crashing, you can increase your SIPs. Volatility only affects the market for the short term. It's almost guaranteed that in the long-term, Nifty and Sensex are only going to grow more and more. Rachit Chawla, CEO and founder, Finway FSC, in an exclusive interview with Bizz Buzz shares investment tips, strategies and hacks to win the market game

What are the five individual stocks to bet on?

I think the following are the five stocks that you should bet on: Yes Bank, CITI Union Bank, Granules India, Dhani and Asian Tiles

How to beat this volatility?

The best way to beat the volatility is to change your SIPs according to the market behaviour. When you feel the market is high, you can reduce the SIPs; and when you feel the market is crashing, you can increase your SIPs. Automatically, the average will be in your favour because tomorrow will be better than today and the markets will continue to rise. Volatility only affects the market for the short term. It is almost guaranteed that in the long-term, Nifty and Sensex are only going to grow more and more.

What are the top five mutual funds schemes to invest in?

I personally would recommend the following 5 mutual fund schemes: Axis Bluechip Fund, Mirae Asset Large Cap Fund, Parag Parikh Long Term Equity Fund, Kotak Standard Multicap Fund and Axis Midcap Fund.

Could you list some checklist to follow while investing in small mutual funds schemes?

Whenever you're investing in small mutual fund schemes, you should bear the following points in mind: Be patient. Rushing would only lead to losses. Set realistic targets. No one becomes a millionaire overnight. You need to work at it continuously. Do your research before investing in the scheme. Perform a background check to ensure everything is to your liking. Invest through SIPs. Gauge your risk-bearing ability before investing. Don't focus on short-term performance as it gives an inaccurate picture and may cause you to make wrong decisions out of panic. In the long term, the market always grows and so does your investment. Don't invest in too many funds as you would, in effect, be investing in the same companies again and again.

Should investors go for pharma funds amid a fresh spike in Covid cases?

The market is always driven by future expectations. Last year, amid the Covid-19 pandemic, the pharma grew by 2X to 5X. So, at the moment, I don't think that pharma would give that many returns as compared to other sectors that are leading the charts.

What is your view on investing in gold?

Gold is a great asset class to have in your books. It is one of the safer investment options and it always beats inflation. However, gold has not really witnessed a surge in recent times. So, one should invest some portion of their capital in gold instead of going all in one.

How fixed deposits can help you for your retirement?

Fixed deposits are generally very safe asset classes. However, they don't beat inflation. So, the money is actually at the par only. FDs don't give significant returns, but from the safety standpoint, they are really great. So if you're planning to create a steady income stream post retirements, you can certainly consider investing in fixed deposits.

How do you see buying health insurance during this Covid time?

First of all, you should always have health insurance, regardless of whether or not a pandemic is rampaging around the world. However, it becomes extremely important to have health insurance when we're faced with a health crisis of this magnitude. The medical bills can stack up pretty quickly and no one can anticipate what the future has in store. Many insurance companies have relieved some good savings plans specifically for Covid-19, which people can consider. The big brands have also started covering insurance for Covid-19 which is great news.

What advice would you give for fixed-income investment options for small savers?

Small savers can consider investing in mutual funds, SIPs, and fixed deposits. Now-a-days, many savings accounts are also offering quite high-interest rates, which are definitely worth checking out. Investing in government instruments is also an option that small savers can explore.

Mutual funds and share market, how much amount of your income to keep for such investments especially during unexpected times of Covid?

It totally depends on your age. Any amount, which you might need in short term should not be kept in a mutual fund or share market because there is a high probability that when you need the money, the markets would be down and you have to withdraw it at a loss. All the money invested in mutual funds and share markets has to be with a vision of the long term.

Is investing in Gov bonds, is beneficial for the middle class?

Definitely! Government bonds are one of the safest investment options for the middle class. If you want to credit your capital and you don't care about the upside, government bonds can come in handy. There offer lower returns compared to some other investment instruments, but they are comparatively safer as well. Whether or not you should invest in government bonds totally depends on your needs. If you're fine with moderate returns and want to avoid unnecessary risks, then you can definitely consider investing in government bonds.

How would you advise one planning for a holiday?

Here are tips to finance the amount to avoid giving a big hole in your pocket. You can plan a holiday by having a particular SIP for just the holiday. You can plan it once and form a new savings account, continue to invest money in the form of a SIP in some liquid or debt fund. This way, when you have enough corpus, you can go enjoy the holiday without worrying about the repayment later on. So, it should always be planned in advance.

What are the benefits of high yielding saving account?

Savings accounts are beneficial when it comes to high yield because the money is in the bank account, sitting idle and giving you returns without you having to take any risks with it. Now-a-days, a lot of saving banks are giving as high as seven per cent returns to their account holders. These are very handy and extremely useful.