Equity, one of the most prominent investment instruments of our times. Something that was seen as the quick and sure-shot means to instant riches up until 2008, when the Sensex witnessed its most phenomenal crash of all times, with the market witnessing a fall from a scale of 21,000 points to something reeling under the 16,000 mark. There was plenty of hype and hoopla over FDIs, FIIs, CRR index, and a lot many terms that are all technical jargon and mean nothing to the common man but for one simple line, his hard earned money is gone. Forever, no, but for a considerable amount of time, definitely. As economists all over the world speculate over one of the most phenomenal crashes in the history of the world markets, many investors and brokers alike in the country went bankrupt, and were even forced to commit suicide (okay, the word ‘forced’ might be a bit harsh, but nonetheless, there were quite a few tragic incidents). Amid widespread protest and the opposition blaming the ruling party for this debacle, the fact of the matter is that amidst all this confusion, the small scale investor is in no man’s land. As the Sensex continues to flip-flop through the days, many people who ran their households based on intelligent decisions by their own understanding of the Sensex are bewildered as even predictions by top-notch finance gurus are proving to be wrong.

So what does the investor do in times like these? Is he supposed to invest in large caps and wait for the long term results? Or in real estate mutual funds (the market is really booming and showing no signs of slowing down)? Are equity mutual funds still good for their money (After trying everything on your own, you can afford a few more risks by placing your money in the hands of an expert)? Are the good old FDs the only option you have left (Inflation! Need I say more)? The answer, quite frankly, is just one. In times like these, you can never put all your savings at one place; It has to be a combination of the above. While this might sound complicated, this is in fact the only way to ensure that you manage to generate some funds in these turbulent times. To quote an example, just like you never put all your money in one stock, you would be much better off by investing in multiple instruments. To start off afresh, do a bit of a research in the market and find out the leading mutual funds based on past performance. While you might not get the same kind of returns, this would solve two purposes. First, you would know about the best mutual fund to put your money in, and second, you would also come to know regarding the stocks these mutual funds have invested in to give good returns, so that if you want to invest into the stock market directly, you would know where to put your money. Next up, pick up tax saving instruments and try to analyze which investment option would be the best to counter inflation, save taxes, and give good returns as well (These days, tax saving mutual funds a very popular option. While the lock in period is quite long, the returns are generally good). Coming back to investing in stock market, the most decent advice would be to stick to long term performers which might not essentially be large caps, since for short term profits, one has to take quite a few risks, some of which are not even worth the effort and the investment put in. FDs are an absolute no-no, and must be taken in extreme cases only, when you just can not afford to take even the minutest of risks.

And last, but by far the best option, if you have not yet traded actively in the stock market and now have the resources to do so, there could not be a better time to invest in equity. This is the time when investments would be the most fruitful, if one has the patience to play the waiting game. Always remember, no matter how down and out the market might be, it always bounces back. So keep faith in companies that are fundamentally strong, and you would be surprised to see the results. These are tough times indeed, but if handled carefully, could prove to be equally rewarding.