Understanding the Impact of Elections on the Stock Market: Anushka Rathod

As you know that election season is going on and people want to know how elections impact the stock market. So, Anushka Rathod, a finance influencer shared her insightful thoughts on this topic through her recent reel in which she explains that What will be the impact of elections in the stock market and what should you do now?

Understanding Market Volatility Through the "Fear Index"

Anushka Rathod explains that the current atmosphere in the market. There is a lot of anxiety and fear in the market due to Elections, US markets, and Foreign institutional investors.
This sentiment is measured by an indicator called VIX (Volatility Index), also known as the "Fear Index." The VIX tells us how much fluctuation there will be in the market in the near future.

Recent Trends in VIX

In Anushka's analysis, she points out a impressive increase in the VIX during the first 10 days of May, increase by a substantial 44%. By comparison, It only increased by 0.3% for the whole month of April. So, because of this high VIX, investors can expect a 5% to 10% fluctuation in the market in the coming days. She acknowledges that it could be even higher but that doesn't mean there will be a major crash in the market.

Historical Market Performance

Anushka highlights the stock market's performance till the current election. The data shows that there was an average return of 29.1% in the year before the election, and a 6% return prior to a month. This historical data provides context to understand current market dynamics.

Advice for Investors

Avoid Panic: Anushka shares practical advice with investors. She says if you keep reading the news and checking your portfolio continuously, it will give you unnecessarily panic.

Long-Term Focus: Anushka suggests these are volatile times, So stay focused on long-term investments like SIPs rather than engaging in frequent trading.

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Anushka Rathod shares the importance of understanding market volatility during election periods. However, by understanding the implications of the Fear Index and looking at historical market performance, investors can navigate these uncertain times with greater confidence.