Investors must tilt portfolio towards quality amid market volatility

Mutual fund investors should maintain a diversified portfolio and continue with their SIPs

On January 6, 2025, the BSE Sensex dropped 1,400 points, while the Nifty declined by 400 points. Many retail investors are encountering their first bouts of sustained volatility in the market. Here’s how they can navigate this phase.

 

Drivers of volatility

 

According to market experts, exaggerated valuations, lifetime-high indices, lower-than-expected corporate earnings, and geopolitical tensions have affected market stability. 

“Concerns over the spread of the new human metapneumovirus (HMPV), subdued updates ahead of the Q3 earnings season, alongside global economic headwinds, have led to heightened volatility in recent months,” says Shreyash Devalkar, head of equity, Axis Mutual Fund.

 

Global tariffs