Investing in a political crisis

Jai and Veeru bumped into each other as they were hurrying to an emergency meeting called by their friend Gabbar. Jai: Veeru, you! Glad to see that Gabbar has called you, too. Is everything all right with him? When he called me, he sounded breathless and said there's an emergency and he needs my help. Veeru: Same here, Jai. But anyway, here we are at Lovely Dhaba. Gabbar: Come, come my friends. Thank you for meeting me so quickly. But it's an emergency, isn't it? Jai: What do you mean, Gabbar? Is everything okay at home? Gabbar: Yes, yes, this is not about home. Veeru: Oh, I am relieved to know that. But what's the emergency then? Gabbar: You've not been watching TV or what? India has done air strikes on Pakistan and downed one F-16. They hit back but released Wing Commanderji and I thought that will be the end. But looking at the heavy shelling and what-not at the Line of Control every day, it looks like this won't get over soon. Veeru: Ha ha! Has defence ministry asked you to come up with a good counter-terrorism strategy, Gabbar? I and Jai know only about SIPs, not MIGs. Gabbar: Very funny! After this India-Pak fight, elections are also due. What a bad time for investing in equity funds. I am going to stop my SIPs and redeem all equity funds. Bank deposits are best in such times. Veeru: How have you come to such a conclusion? Gabbar: By looking at my returns. See, I listened to you both and am a very disciplined investor in multi-cap equity funds. I am regular with my SIPs. I believed that SIPs were good in falling markets and you can't deny that the Sensex has been falling continuously. But when I look at my portfolio statement, I get acidity. Its value is less than my cost. Jai: When did you start your SIPs? Gabbar: In January 2017. Jai: Your portfolio is showing losses because stock prices today are at far lower levels than the levels at which you have been investing. Here, let me show you the Nifty 50 graph and you will get it. Se

This article was originally published on April 04, 2019.