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What is this episode about?
In this eleventh episode of the Prime Podcast, Vidya Bala discusses the current volatile markets triggered by several concerning macro news and the risk of trying to take cues from such macro events. She addresses the concerns raised by investors regarding a market correction dissipating their profits and how to lock into some profits without taking an all-or-nothing call.
Vidya explains that attempting to time the market by fully exiting or re-entering investments can be futile and risky. Instead, she suggests employing a strategic approach to book profits without timing the market, focusing on asset allocation and gradual rebalancing. She advises investors to consider reducing equity allocation if their financial goals are nearing. Additionally, she discusses the importance of evaluating individual stock valuations and gradually selling underperforming stocks while maintaining a list of potential stocks for reinvestment. She also suggests considering investments in indices as a safeguard during market downturns.
Throughout the podcast, Vidya emphasizes the significance of maintaining a long-term investment perspective and focusing on the earnings growth of companies in one’s portfolio. She advises against making impulsive decisions based solely on market fluctuations and encourages a thoughtful approach to managing investments during market uncertainties.
Key segments in the podcast discussion
- Intro (0:05 – 4:45)
- The futility and risk of timing the market (4:36 – 9:08)
- How to book profits without timing the market (9:09 – 23:36)
- Profit Booking in stocks (23:37 – 32:27)
- Should you stop existing investments? (32:28 – 37:55)
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