The ups and downs of the market and wild intra-day swings are really giving everybody heartburns. Investment experts warn that market volatility is something that we all have to live with as global markets get increasingly integrated. So how can we, who are starting to stash away their savings towards long-term wealth building, deal with these risks? Here are a few ground rules:

Markets are in a volatile phase and are now tuned to global cues, but long- term investors with disciplined investment style and who invest in keeping with their risk profile will always buy into sharp falls and will be winners at the end of the day. Investors should try to time the market more broadly, keeping in mind forthcoming events like results and impending political upheavals while trying to calculate the right time to enter. Ups and downs in the Sensex are here to stay, not need not think that every correction is going to spell doomsday.  

One needs to review investments and iron out flaws in a regular manner. If negative news is expected one should exit the stock before the market does. Similarly, buy into bluechips which have been beaten down for over 6 months, but do so in small lots.....at every fall. There are good stocks available at fairly low valuations like Cipla, Aurobindo, Lupin and Subex Azure. Systematic investment planning goes a long way in wealth accumulation. Research reports and quality of advice should be carefully considered before going ahead with one's investment.

One has no control over the markets' behaviour, but we can control our animal instincts and herd mentality with realistic return expectations from various asset classes. Remember that to earn a higher return, one needs to take higher risks. However, such risk-taking acts should be accompanied by long duration calls. Just divide half your portfolio into long term holdings(+5 years) and the other half for medium to short term (1-3 years).

The stock market is not a place where you can make a quick buck. You need to stay updated on market developments and restructure your portfolio over a period of time. There used to be a time when gilt and debt mutual funds delivered returns in the range of 20 per cent, following a decline in interest rates. Then we witnessed the `Goldilocks' effect, where a combination of low inflation and high real GDP growth rates and attractive valuations set stock markets on fire. Now, markets are entering a mature phase with some room for interest rates to rise. Soaring crude prices are creating worries on the inflation front. Therefore, one should try to link one's return expectation with the changing global outlook. One should revisit the financial planning at different stages of one's life cycle. The key to successful planning lies in better control over emotions through market ups and downs.

There are no permanent bull and bear markets. Be a disciplined investor and avoid speculating. One should always keep an eye on the bigger picture and evaluate investment objectives to be achieved over one's lifetime. India is on the way to experiencing economic prosperity owing to favourable demographics, outsourcing, consumption, innovation, and political stability. This is likely to ensure that the Indian stock market remains centre-stage. For the slightly aggressive investor -- Put 50 per cent in a large-cap fund, 35 per cent in a mid-cap fund and 10 per cent in a dividend yield/opportunities /flexible investment fund and 5 per cent in an ELSS fund. Mutual funds are convenient investment vehicles for not-so-savvy investors.

Continued rally in the market should be used to rebalance one's portfolio, by cutting exposure in more risky stocks and sectors. Next one should consolidate their positions in the best performing stocks and buy into undervalued bluechips expected to have improved business cycles  going forward. Re-assess the investment objectives of each investment at regular intervals. Risk reward is now in favour of investing but speculation should be avoided. Do not panic, as some of the adverse market swings are a matter of global investment triggers. Always keep in mind that investment planning is a long-term process. Higher return always come with relatively higher risk taking, do not take these risk unless they are well covered. Make use of  as much information as you can to fully understand the nature of the investment. Last, remember that wealth cannot be created overnight and there are no short cuts to investing. Reassess your risk appetite in every market downturn as a routine health check to align future goals with portfolio performance and either add or exit depending on your risk appetite.