Kolkata: Donald Trump’s announcement of retaliatory tariff and then their suspension for 90 days rocked the global capital markets unlike anything in recent years with most analysts and economists uncertain at what the ramifications can be. Amid the uncertainty, Rahul Bhutoria, director and co-founder, Valtrust Capital, tells News9live.com what a common investor can consider doing.
“Post the Market crash basis the announcement on reciprocal tariff by Trump administration, the markets have started to bounce back…. Trade negotiations, by their nature, tend to be complex and drawn out over long periods. Thus, the 90-day window is likely to keep uncertainty alive,” remarked Bhutoria. But the question on many lips is, “Is there any uncertainty still left considering there is 90-day pause Imposed by Trump administration?”
Disciplined approach holds the key
“For investors who have been aggressive with equity allocations, this could be an opportune time to rebalance portfolios and allocate a portion to short-duration products. Meanwhile, investors looking to build or increase their equity exposure would be better served by spreading investments over a longer timeframe rather than trying to predict short-term movements,” said Bhutoria.
His prescription: Taking a measured and phased approach helps mitigate volatility and aligns with a prudent investment philosophy focused on sustainability rather than short-term market timing.
Given that many would perhaps tend to hold onto cash in the uncertain conditions, Bhutoria says they should not leave the cash to stay idle but could “explore options such as low-duration short-term debt instruments like Liquid Funds, Overnight Funds, Ultra Short Duration Funds and Arbitrage Funds”. “Short-term debt funds invest in ultra-short-term securities and typically offer returns in the range of 6-6.5%, combined with the benefit of liquidity. They enable investors to earn reasonable returns while retaining the flexibility to deploy funds quickly when better opportunities arise,” he added.
Arbitrage funds
Bhutoria highlighted that arbitrage funds, which operate on price differences in equity and derivative markets, offer stable returns — around 7% in recent months — with relatively very low risk. Arbitrage funds work well if the investment horizon exceeds three months, he pointed out.
“For short-term parking of funds, instruments with an average duration of 6-9 months are appropriate. The duration should be aligned with the planned deployment period of the funds. One potential strategy could be to stagger investments across multiple short-term funds with varying maturities to meet different equity deployment timelines”.
Creating liquidity buffers
An effective approach for investors is to create liquidity buffers using these short-term debt funds or arbitrage funds. “As opportunities arise, this liquidity can be gradually deployed into equities. Once partially utilised, investors can redeem and replenish liquidity, maintaining readiness without the need to time the market precisely,” Bhutoria said. This strategy ensures that systematic deployment into equities continues, while providing flexibility to take advantage of corrections without exposing the portfolio unnecessarily to market timing risks.
(Disclaimer: This article is only meant to provide information. News9 does not recommend buying or selling shares or subscriptions of any IPO, Mutual Funds, precious metals, commodity, any form of alternative investment instruments and crypto assets.)
US President Donald Trump roiled the markets around the world with his announcements of retaliatory tariffs. The moot point for the common investor, how to navigate his/her investments in the choppy waters. Rahul Bhutoria, director and co-founder, Valtrust Capital speaks to News9live.com. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
