Do Not Chase Foreign Investments

Whenever there is a big buy or sell by Foreign Institutional Investors commonly known as FIIs, it becomes a big headline and everyone starts talking about it. They are believed to be the movers of the market. But does the FIIs investment entry or exit matter to the retail investors out here in India? Whenever there is a fall or gain in the market, the headlines show that the FIIs have put in so much money or taken out so much money, and thus retail investors start following the trend.

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PC: Pixabay.com

Now the problem is if someone sells, someone has to buy and this is where the domestic investors come into the picture. Whenever FIIs sell DIIs buy and vice versa, so it's always better to not chase the FII's entry or exit but start creating your own entry or your own exit. It was believed that 3-4 years back FIIs were the movers of the market but anymore. There DIIs have almost equal amounts of money in the market who does moves the market ups and downs.

The FIIs might not be long-term investors but if we go by the data the DIIs are long-term investors and if they are betting big on a sector or fund, it is bound to give good returns. And also it is not good to chase any investments whether DII or FII. Your decision to invest in the market depends on how you want your portfolio to behave and other financial objectives. So it's obvious for us to not chase Foreign Investments.

So even people think that FIIs are making big headlines that they remove so much money or added, but eventually, the market will go up for the long term and just that we have to be invested at that time frame. Also, it's good to invest whenever there was a dip in the market so that you get more returns in the future.

Posted Using LeoFinance Beta



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