Investors fear a bear market.
“I’ll tell you how to get rich. Shut the doors. Be fearful when others are greedy. Be greedy when others are afraid.” – Warren Buffett
it famous quotes from buffett Relevant today.
Investors fear a bear market. His personal portfolio is already in a bearish market. they are worried about further fall in the market and potentially wipe out their investment.
The big question on the mind of investors is what to do in this situation.
Should you sell, take your loss and exit this volatility?
It will be painful but it will also bring some relief. However, selling brings with it the risk of missing out on the V-shaped recovery, as we saw in April 2020.
You have the option of partially selling your holding, but this will not solve your dilemma, only reduce it. In this case, you’ll need to make another decision about how much to sell.
What about keeping?
This is more painful than selling because you can potentially see more losses. A portfolio that is down 30% may be down 50% or more if you hold onto falling stocks.
Should you buy more?
There are many investors who have some money they can invest. They may also choose to sell some shares to invest that money in others.
There are others who have missed the rally and are willing to join now. Should you buy now, you are essentially taking a call on the market as a whole. In other words, you may be hoping for a speedy recovery.
If it doesn’t, you’ll soon regret your decision to pull the trigger. You will also have to wait for some time before your portfolio breaks down.
What is the best decision?
As you’ve probably realized, there are no easy answers.
And that’s right. There is no easy option to invest in the Indian stock market today.
The uncertainties – interest rates, inflation, slowdown in growth, changing geopolitics – are just too high. No one can predict what the market will do next.
However, one thing is clear. Bears have the upper hand in the short term. It seems they are in control these days. Almost every trading day ends in a fall.
At the time of this writing, Nifty is below its recent low in March 2022. Many largecaps are down more than 15%. The broader market performance of midcap and smallcap has been poor. Some of these stocks are already down 50% from their all-time highs.
But that doesn’t mean you can’t make money in Indian stocks. You can do.
You just need to look in the right places.
That’s what we recommend…
* If you have found a good stock with rock-solid fundamentals and it has fallen to a reasonable level, it is time to invest some money. Take partial exposure. If the market keeps falling, you can invest more.
*If you are looking for stocks that tick all the right boxes with regards to long term investing, here is an editorial you must read – Looking for Consistently Compounding Stocks? Here’s a watchlist for you.
If you want to start fresh, it is a good idea to look for the lowest priced stocks in the market. This is a good place to start your search with a fresh mind. View Equitymaster’s Stock Screener Most Undervalued Stocks,
* If you remain in stocks with poor or questionable fundamentals… SELL. They don’t deserve to stop.
* If you have high quality stocks in your portfolio, you can retain them. Keep a close eye on their core principles.
* If you are a trader, it may be a good idea to exit this volatility, unless you want to make money selling short.
These pointers will help you clear some of your doubts about investing in the market today.
Happy investment!
Disclaimer: This article is for informational purposes only. This is not a stock recommendation and should not be treated as such.
This article is syndicated from Equitymaster.com
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)