Volatile Markets and higher disposable income due to New Tax Slabs 2025: What Retail Mutual Fund Investors Should do in 2025?

The current geopolitical situation and weak domestic business sentiment through a volatile equity market witnessed end of 2024 and beginning month of 2025. The situation currently looks weak and retail investors are confused the actionable required on this market situation. The silver lining for domestic investor is new Tax slab on New Regime. This change is expected to increase the disposable income of individuals, putting more cash in their hands.

Remember, market volatility can be unsettling, but it's essential to stay calm, informed, and focused on your long-term investment objectives. The stock market has indeed experienced numerous periods of volatility and significant events throughout history. Events both international and domestic whether political or economic factors has given temporary volatility in the market.

Despite the various challenges and setbacks, the Indian and global economies have consistently demonstrated resilience and adaptability, leading to growth and progress over time.

To navigate this volatile market, investors may consider the Goal Based Approach on 2025

Goal Based Approach focuses on Planning and achieving Financials goals. This approach considers your individual circumstances, risk tolerance, Time in the market rather than timing the market and objectives to create a personalized investment plan.

The strategies which may adopted by investors on this approach are as below

• 1. Risk Diversification: Spread investments across different asset classes, sectors, and geographies to minimize risk.
• 2. Investment based on Time Horizon: Focus on long-term goals and avoid making impulsive decisions based on short-term market fluctuations. Investment decision on asset class by keeping goal in mind.
• 3. Rupee-cost averaging: Invest a fixed amount of money at regular intervals, regardless of the market's performance, to reduce timing risks. Never discontinue Systematic Investment Plans. This helps averaging the cost of assets in your hand. Market volatility is discounted here.
• 4. Tax-efficient investing: Take advantage of the new tax slab and consider investing in tax-efficient Equity mutual fund instruments for LTCG.
• 5. Review and Rebalance: Periodically or at least yearly once assess your progress, rebalance your portfolio based on your goal.
• 6. Professional guidance: Consult with a financial advisor or investment professional to create a personalized investment plan tailored to your risk tolerance, goals, and time horizon. The Value addition of an expert is very high during this testing time and also on rebalancing at right time. Managing emotions are very important on this difficult time.

People's ability to innovate, adapt, and find solutions to complex problems has driven growth and progress. Businesses, individuals, and societies have demonstrated an ability to adapt to changing circumstances, leveraging challenges as opportunities for growth and innovation. The Indian Leadership resources has always shown resilience and bounced back the challenges by adopting innovative strategies and delivered on earnings which is the underlying reason for market Returns.