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- Intermittent bouts of stock market volatility are anticipated until the electoral outcomes are clear.
- According to Ashish Gupta, chief investment officer at Axis AMC, these fluctuations are a healthy market correction.
- “Periodic corrections eliminate excesses and create fresh investment opportunities,” Gupta explained.
This analysis of stock market trends offers insights into the strategic adjustments by investors during electoral periods.
Understanding Market Volatility During Election Cycles
Market volatility tends to increase during election periods as investors react to the uncertainty of future economic policies. Ashish Gupta of Axis AMC, which manages assets worth approximately ₹2.6 trillion, views these market movements as normal and even beneficial. By shedding overvalued assets, the market self-corrects, potentially leading to more stable growth in the future.
Investor Behavior in Times of Uncertainty
Despite the inherent unpredictability during elections, Gupta observes a trend where investors increasingly lean towards equities. This shift suggests a strategic reallocation of portfolios, possibly as a hedge against volatility. Equity markets often offer higher returns, albeit at higher risks, which might be why they attract more attention during uncertain times.
Conclusion
The insights provided by Ashish Gupta highlight the importance of understanding market dynamics and investor behavior during electoral cycles. Recognizing these patterns can help investors make informed decisions, turning potential market turmoil into opportunities for portfolio growth.
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