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What is the best investment in the current market? – Deccan Herald

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What is the best investment in current market conditions? Should I buy gold? Should I exit SIPs and invest in International stocks or buy Index funds/ETFs? Should I play it safe and invest into capital guaranteed insurance plans? These are regularly asked questions in my sessions.

First, there is no such thing as the best investment in the current market. The best investment is actually an instrument that is aligned to your financial goal and investment timeframe.

By searching for the best investment in an ad-hoc manner, investors are making the following mistakes :

1. Using their emotions to guide their financial choices rather than choosing the right fit for a goal. For example,  by investing in capital guaranteed products, investors may be satisfying their loss aversion bias, but these low returning products would certainly not help in meeting financial goals as they don’t beat inflation.

2. Let recency bias, which is basing investments on recent events, affect their portfolio. Investors who are piling up on gold based on its stellar performance this calendar year,  run the risk of investing at a high.

3. Have a portfolio which is not diversified. Investors diverting mutual fund SIPs to stocks will not only have a tax and cost impact but may have a concentrated portfolio leading to higher risk in the portfolio.

Long term investing is a process. People want that magic pill which will give them a product that gives the best return with the lowest risk but that doesn’t exist. And that is why goal-based investing is harped upon all the time. Often, I find that people are not willing to listen to any process, which involves patience and may not have excitement or something to boast about, but it is the process of choosing investments based on goal planning, which will get you into the “best investment”.

The best investment is about risk management and a strategy.

The strategy is a financial plan. You can’t hope to have financial success if you do not have a plan to achieve it. For this, work with a financial planner rather than just following a blog or listening to market gurus in media. Sticking to the financial plan is a challenge. Individuals get financial plans written but are not able to follow through. This is because of being diverted by current markets/ short term requirements. Like in all areas of life, financial success is dependent on your planning and actions.

Risk management is about managing the risk of volatility and loss. You cannot control market movements, but you can control your portfolio volatility by asset allocation and diversification. For any investment product, understand the risks involved and how it would affect your capital and then diversify among asset classes that do not have the same risk. This means having a combination of stocks, bonds, gold, real estate, etc. Each asset class has different risks. Within the asset class, diversify. If you are investing in equities, diversify among large caps and midcaps. Don’t stick to one type of investment only.

Building wealth is a marathon, not a sprint. Stop looking for the best investment in the current market and focus on investments that can last you through all phases of the markets.

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Investment

Tesla shares soar more than 14% as Trump win is seen boosting Elon Musk’s electric vehicle company

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NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.

Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.

“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”

Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.

Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.

Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.

Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.

In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.

The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.

And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.

Tesla began selling the software, which is called “Full Self-Driving,” nine years ago. But there are doubts about its reliability.

The stock is now showing a 16.1% gain for the year after rising the past two days.

The Canadian Press. All rights reserved.

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S&P/TSX composite up more than 100 points, U.S. stock markets mixed

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TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.

The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.

The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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S&P/TSX up more than 200 points, U.S. markets also higher

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TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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