Ways to not let a volatile market deter you

What are the ways to invest in the stock market? This is a pertaining question most investors ask. Once you figure out the process, you get comfortable. You can buy and sell shares, mutual funds, and other money market instruments and learn to adjust to market flow. But what happens when the market suddenly crashes? As a new investor, you may panic, cut your losses, and exit the market.

But a seasoned investor knows how to react to the share market today. Here are some tips for not allowing a volatile market to deter you:

Avoid getting flustered

You should not panic. You should face the fact that there could be possible upward or downward movements, and you need to remember that this fluctuation lasts only for a short term. It may take a day or a week, but the market will recover soon. Instead of getting flustered, remember that your investments are for the long term. If possible, you can extend the duration to recover your losses instead of exiting the market unwisely.

Do not make stock price the sole focus

This is a fundamental mistake that most investors make. The most impulsive decisions are taken when the stock price is your only focus. Any investor who understands today Nifty knows this market is inherently complex and layered. While price appreciation is essential, it is not the only thing that should make you buy, sell, or hold a stock, especially during a crash.

If you earn good dividends, irrespective of the stock price, you should continue holding them. The dividend alone makes up for the falling stock prices.

Review asset allocation strategies

During a market crash, focus on reviewing your asset allocation and re-strategising your investments. Look at the crash as an opportunity to eliminate the non-performing securities from your portfolio and modify investments. This may seem risky, but it is a risk you should take. After all, the share market is a gamble backed by research reports, market analysis, and predictions. Seek financial advisory and make the necessary changes to your portfolio.

Invest in the bear market

The most important tip is to invest in stocks with low prices, like the ITC share price, and sell them off upon booking a profit. Falling share prices are an excellent opportunity to invest in different shares.

Invest in blue-chip funds

As your financial advisor tells you, large blue-chip company stocks are generally less volatile and can offer stable returns, unlike their mid or small-cap counterparts. You should consider allocating assets towards blue-chip stock investments when the market recovers.

Remember these tips if you are tempted to cut losses during volatile periods, and understand that such conditions are only temporary.

Posted in Business News on January 09 at 02:51 PM

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