WhiteOak Capital AMC CEO Aashish Somaiyaa is advising investors to maintain their Systematic Investment Plans (SIPs) despite recent market stagnation. He notes that halting contributions during market lulls often causes investors to miss out on the eventual recovery phase. Instead of stopping, he suggests focusing on asset diversification through hybrid funds and alternative instruments to manage portfolio volatility.
Aashish Somaiyaa, CEO of WhiteOak Capital AMC, has advised retail investors to remain disciplined with their Systematic Investment Plans (SIPs) despite a period of muted market returns spanning the last two years. While market stagnation can create anxiety, Somaiyaa suggests that stopping SIPs at this stage may be counterproductive for long-term wealth creation.
Market cycles rarely move in a straight line. History suggests that a large portion of long-term wealth is often created during a short, concentrated window of time. By pausing SIPs during a flat market, investors risk missing the recovery phase, which can be sharp and rapid. The fundamental benefit of a SIP is cost-averaging, where investors buy more units when prices are low and fewer when prices are high. If an investor stops contributing when the market is quiet, they essentially lose the ability to acquire assets at potentially attractive prices before the next growth cycle begins.
Diversification as a Strategy
For investors feeling the pressure of equity volatility, the CEO suggests that they do not need to rely solely on pure equity funds. Diversification remains a key tool for managing risk. Investors can consider hybrid funds, which rebalance across equity, fixed income, and gold, providing a buffer against market swings.
Beyond traditional mutual funds, Somaiyaa points to Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) as additional options for capital allocation. These instruments are designed to generate cash flows from tangible assets, such as rental income from buildings or revenue from toll roads, which can offer a different return profile compared to standard equity investments.
Understanding the Risk
While the advice focuses on staying invested, it is important for investors to remember that equity markets remain subject to volatility. An extended period of flat performance can be difficult for portfolios that are overly concentrated in a single sector or theme. A disciplined approach does not guarantee profit, but it helps avoid the emotional trap of panic-selling during a downturn.
Investors should monitor their asset allocation regularly to ensure it aligns with their financial goals and risk tolerance. As the market environment evolves, the focus should remain on long-term fundamentals rather than short-term fluctuations. The primary monitorable for investors remains their personal goal horizon, ensuring that any changes to their investment strategy are based on their long-term financial needs rather than temporary market noise.