Market doesn’t like changes and as per Jefferies markets will fall by 25% if there is a new Government.
But instead of worrying you should plan for the event.
Many people think election is a risk,NO.
Risk is something that you don’t know. With elections we can plan our action basis outcome and hence I call this an event.
How are we planning?
1. Not taking much action till the beginning of the voting. We believe the valuations especially largecap are attractive and hence will like to hold.
2. Set aside dry powder. We would keep a portion of my portfolio in cash, which we would use if the market falls.
3. Exit overvalued assets. This is something we all should do. If we have funds in categories that are overvalued maybe exit some or all to avoid bigger impact.
4. We don’t do stocks but if at all you have Public sector companies,we should reduce or exit
5. Keep an eye on earnings. If it’s looking up then we would not be concerned about results.
Markets are a great discounting machine and if it gives you opportunities grab it with both hands.
