Markets crashed & markets bounced back, a bit… But still the impact of the blood bath, which took place on the Dalal Street
Everytime when the markets crash, we hear all sort of news like people mortgaging their assets, becoming bankrupts or even committing suicides… I do not doubt the authenticity of these news items but according to me, most of the people who face such crisis are not the actual investors… And they are actually day traders, Futures & Options (F&O) segment players or arbitrators, who end-up losing such huge amounts of money because of their greed to earn more and earn fast …
People who think that stock market is a place where one can make quick money are generally wrong, those peoples are the ones who actually suffer the most in these crashes… I’ve no doubt that F&O segment presents a wonderful opportunity to earn money faster than the normal investment; but for that one should be aware of all the risks involved with F&O trading and also he/she should have a good knowledge about the technicals and fundamentals of these stock markets…
In the short span of my investment career, I’ve been lucky / unlucky to see 2 such market crashes, after which people were startled and stumped. Personally speaking, it had been a great learning experience for me… It taught me, how to be cautious when everyone around the corner is bullish on the markets and also how to book profits at regular intervals, so as to have some liquidity… Although till date, I had not followed the second point by myself but I plan to do so in the near future...
For me, the stock market represents a very good opportunity to multiply my savings… I’m a firm believer that if one invests logically in equities then he/she will definitely get better returns than any other mode of investment, whether it’s Mutual Funds, NSC, PPF, Fixed Deposits, Bonds, etc.
Udayan Mukherjee of CNBC fame wrote in one of his articles, "Lessons from January 2008" on moneycontrol.com, “You are happy to put money in a bank FD and then wait for one full year to collect that measly 8%, aren't you? Then why does the stock market need to give you 20% every month?”
As experts suggest, I too believe that these crashes are excellent buying opportunities for a long term investor; it gives a chance to enter the market as well as to average out your portfolios… According to my personal experience, buying bluechips or large caps stocks is a good idea at such dips since they recover faster than the mid caps and the small caps, and by any chance don’t buy penny stocks at such times…
And one thing is clear, I still believe in the Indian Markets. Whenever these experts or our Finance Minister says that the long term investors shouldn’t be worried because the fundamentals of the markets haven’t changed, I agree to them… Indian economy was, is and will grow at the rate of more than 8% per annum, the corporate will continue to deliver better results quarter by quarter and hence our markets will remain good place to invest and earn better returns…
In short,India
Everytime when the markets crash, we hear all sort of news like people mortgaging their assets, becoming bankrupts or even committing suicides… I do not doubt the authenticity of these news items but according to me, most of the people who face such crisis are not the actual investors… And they are actually day traders, Futures & Options (F&O) segment players or arbitrators, who end-up losing such huge amounts of money because of their greed to earn more and earn fast …
People who think that stock market is a place where one can make quick money are generally wrong, those peoples are the ones who actually suffer the most in these crashes… I’ve no doubt that F&O segment presents a wonderful opportunity to earn money faster than the normal investment; but for that one should be aware of all the risks involved with F&O trading and also he/she should have a good knowledge about the technicals and fundamentals of these stock markets…
In the short span of my investment career, I’ve been lucky / unlucky to see 2 such market crashes, after which people were startled and stumped. Personally speaking, it had been a great learning experience for me… It taught me, how to be cautious when everyone around the corner is bullish on the markets and also how to book profits at regular intervals, so as to have some liquidity… Although till date, I had not followed the second point by myself but I plan to do so in the near future...
For me, the stock market represents a very good opportunity to multiply my savings… I’m a firm believer that if one invests logically in equities then he/she will definitely get better returns than any other mode of investment, whether it’s Mutual Funds, NSC, PPF, Fixed Deposits, Bonds, etc.
Udayan Mukherjee of CNBC fame wrote in one of his articles, "Lessons from January 2008" on moneycontrol.com, “You are happy to put money in a bank FD and then wait for one full year to collect that measly 8%, aren't you? Then why does the stock market need to give you 20% every month?”
As experts suggest, I too believe that these crashes are excellent buying opportunities for a long term investor; it gives a chance to enter the market as well as to average out your portfolios… According to my personal experience, buying bluechips or large caps stocks is a good idea at such dips since they recover faster than the mid caps and the small caps, and by any chance don’t buy penny stocks at such times…
And one thing is clear, I still believe in the Indian Markets. Whenever these experts or our Finance Minister says that the long term investors shouldn’t be worried because the fundamentals of the markets haven’t changed, I agree to them… Indian economy was, is and will grow at the rate of more than 8% per annum, the corporate will continue to deliver better results quarter by quarter and hence our markets will remain good place to invest and earn better returns…
In short,
PS: The above mentioned content are my personal views and may vary according to the markets...
