Investing Through Business Cycles Is Now Simplified3 min read
In this edition of Paytm Money Talks we bring to you a one of a kind conversation with some of the top minds of our country.
Mr. Anant Ladha (CA, CFA, LLB, spreading financial literacy to millions of investors through his YouTube channel – Invest Aaj for Kal)
Mr. Vineet Maloo (17+ years as an expert in the capital market and fund manager for Aditya Birla Sun Life)
With them we discuss Business Cycles and learn about the new fund which is designed to make your portfolio conscious of these cycles.
Sounds complex, right? Don’t worry we explain it here in the simplest way possible!
But if you are more of a visual learner you should probably watch our YouTube Video on the topic
Now since you have made the nerdy decision to read…
Here’s what our expert Anant Ladha has to say!
What is Business Cycle
In the simplest of ways, Business Cycle is a term used to describe the ups and downs in economic activity over time.
It is made up of 4 cycles
In this phase, the level of economic activity is really high. All economic activities including income, output, salaries and production are at the highest levels.
This stage follows the growth stage where things start to slow down. Economic activities start to fall.
Here, all economic activities have fallen drastically and unemployment is at an all time high.
This stage follows the slump stage where things start to speed up again. All economic activities including income, output, salaries and production start to rise and grow rapidly.
Now, how can you as an investor make use of this information?
It’s simple! Remember the March 2020 crash (recession phase), when pharma outperformed almost all other sectors? However prior to that, when the economy was in a growth phase, the returns from pharma were negligible.
The point is, that some sectors tend to outperform in some cycles while underperforming in others.
But wait, for a retail investor with limited knowledge it is difficult to apply the idea of business cycles to investing.
So with our mission at Paytm Money Talks to enlighten our viewers with a proper understanding of the current and future market scenarios, we asked our expert Mr. Vineet Maloo to help us out.
And Voila! Here’s what he suggested.
BUSINESS CYCLE FUNDS
The funds are those which are designed to make your portfolio conscious of business cycles. Different cyclical phases tend to favor different sectors.
By focusing on identifying these opportunities in advance, this fund has the potential for growth through all business cycles.
If you are new to the idea of investing through business cycles, click here for more details.
Now with this new ocean of knowledge, we hope to see you become better investors!
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Hoping to see you at our next show!
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