After a sharp rally, making lump-sum investments gives rise to timing risk. “Don’t chase
momentum based on the past year’s returns, as the best time to enter a volatile asset is
rarely at its peak,” says Ranjit Jha, managing director and chief executive officer, Rurash
Financials.
A supply shortage has led to silver ETFs trading at unusually high premiums, prompting
some fund houses to pause lump-sum inflows. “By halting lump sums, fund houses are
preventing investors from buying units at the current inflated, temporary cost. Loss is
imminent when supply normalises,” says Jha.
Jha, too, suggests that investors with large sums should wait until physical supply
normalises and ETF premiums ease. Finally, he cautions against speculative trading in
silver futures, given their high volatility.
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