Rupee, Sensex haywired; Should you rebalance your investment portfolio?

The Indian markets have recovered quite a bit on buying mainly in metal, PSU, oil & gas, consumer durables and healthcare sectors.At 1.11 pm, the BSE Sensex is at 18246.42, up 340.51 (1.90%) while the Nifty is up 5394.65, up 1.74 percent.However, the market is still under pressure as the rupee hit a new record low of 65 against the dollar after minutes of the Federal Reserve’s last meeting signalled the US central bank was on course to pare bond purchases this year, as per this Firstpost story notes.

So what should a lay retail investor do in such a yo-yo market scenario?

[caption id=“attachment_1038649” align=“alignleft” width=“380”]  Reuters[/caption]

Pankaj Mathpal, Mumbai-based Certified Financial Planner, says: “Sentiments are really low in the market now, but the retail investor should still continue with his SIPs, which he made for a long term goal.”

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Even if there’s a notional loss, he says there’s no point in booking losses as of now. Let the notional loss remain a notional loss; don’t actually book the loss. Hold instead. As far as buying goes, he does not recommend bottom-fishing, as the markets may have further to fall. You may get a few more opportunities to buy later on. In short, continue to make these SIPs and stay put.

Even if you are tempted to make a lumpsum investment into IT, FMCG, Pharma stocks, you may want to seek advice from your financial planner before going on a shoppping binge by listening to stock pickers.

This may be a good time to look into investing into FMPs, but that would depend on your individual risk profile and the duration for which your funds can be invested into. Read here.

Should you be rebalancing you portfolio, righ away? May be you should revisit your portfolio and see the kind of rebalancing you need. But this is not strictly necessary, since the market direction is not certain. It may be worth waiting for this week to tell us more before actually doing any rebalancing of the portfolio.