Stock markets have remained volatile in current calendar year. Both the market benchmark indices – S&P BSE SENSEX and CNX NSE NIFTY – have corrected over seven percent each in year-to-date, with sharper correction seen over last two months.
India VIX, which is a measure of market volatility, has surged more than 30 percent in year-to-date.
Several variables are influencing stock markets right now, rising inflation, rising interest rates, crude oil price rise, ongoing Russia-Ukraine crisis and lockdown in China amid resurgence of Covid-19 cases.
Frequently Asked Questions
A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.
There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.
Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.
Diversified equity funds have also felt the impact. For small cap funds, the category average returns in year-to-date has declined by 13 percent. For mid-cap funds it has slipped by over 11 percent and for large cap funds it is down by eight percent.
The heightened market volatility has spooked investors, especially those who are experiencing such volatility for the first time in their investment journey. In today’s episode of Simply Save Podcast, we are joined by Mahesh Mirpuri, founder of Invest Mutual, a mutual fund distributor handling assets of more than 120 families. He tells us on how investors how investors can navigate this phase of market volatility.
Some key takeaways: