The Indian equity market is facing corrections since the last week. Sensex has lost around 1,700 points and Nifty 50 has fallen 500 points in the past week. This is the time when you should keep calm and not panic and end up taking the wrong steps. Here are 5 tips which you must keep in mind in such market conditions.
Don’t Panic Sell:
You should always keep in mind why had you invested in that particular stock and the reason for the price falling before taking a decision to exit.
Don’t stop your SIPs:
The main purpose of SIPs is to overcome market volatility. Since the markets are crashing you will be buying more units at a lower price, and eventually when the markets will rebound you shall receive the benefits.
Don’t just buy at Lows:
It is not necessary that a share available at a low price today shall definitively increase in future. The right way to invest in a stock is to analyze the track record of the company completely by looking out for its Revenues, profits, PE and DE ratios.
Don’t just buy into One Sector:
Do not put all your eggs in one basket. Due to correction if the stock prices of a particular sector are attractive do not just invest all of your money into it. Make a reasonable diversification in your investment and analyze the stocks completely.
Don’t take Leveraged Bets:
It means do not borrow money or take loans to invest into the stock market. This is quite a risky option in general and particularly for a volatile situation. If you borrow to invest, the least that your investment has to make is the interest cost you are paying on the loan, which might not be assured in a volatile market in the short term.
