In the next few hours, the last phase of general election 2019 will be completed, and we will witness a frenzy of activities on different media platforms about exit polls or opinion polls that will present you different result predictions. Investors should expect volatility in the market this week. It may not be suitable for retail investors when they face the market the next morning. The final result will be out on 23rd May 2019. A fractured mandate may be seen negatively by the market; however, a full majority to one party or coalition will ensure confidence in our market. Now coming to the risk of uncertainty and volatility that will remain there till the outcome, an investor should stick to their long term planning and need not panic at this stage. But it is always an excellent option to take appropriate risk measure based on your risk profile. It is also advisable to consult your financial adviser and do not make any decision based on short term trends.

Now coming to the last five years, we have witnessed some bold steps in the reform process. Some reforms were tough, but despite that got a positive response from the investor community and retail investors continued to invest through mutual funds is another proof of that.
A stable government with a focus on the reform process had created confidence in retail investors. The mutual fund investors now invest looking long term investment horizon and like to ignore the short term uncertainties due to other factors. The advantage of investment planning and the success of systematic investment plan among retail investors are some other reason to accept mutual fund as long term investment product.
There are some other factors which highlighted the risk in mutual fund investment. The default crisis at IL&FS has triggered panic in the NBFC market. Another issue related to FMP plans that indeed highlighted the risk involved in debt funds. We will cover more on debt fund investment in next articles in our investment series for the benefit of debt fund investors.
Coming back to the election result, as an investor, you should expect some volatility in the market. But a clear majority to one party will receive positive response in the stock market.

(Anwesh Sachin, SEBI-RiA, SEBI Registered Investment Adviser )
Disclaimer- The views and opinions expressed in the article are only for information purpose. The information/content/views provided here does not constitute any personal advice.