Fall in markets_March 2020
Greetings everyone:
I know that you might be a bit concerned over the fall in our stock markets & markets around the world.
We had a hard time last week & this week has been no different. Markets are falling and when markets fall… people think that they will keep falling. The fact is no one knows how much it will fall and from which point it will turn around. We are in a grossly oversold zone; so technically the movement should be upwards or sideways.
Sentiments are quite timid at the moment and there is way too much nervousness. Slightest of reason and markets fall. Anyways a 10% – 20% fall in equities is to be expected at any time. That is one of the fundamental rules of equity investing. Another ruler is, sharper the fall… sharper is the recovery. So for the time being we may suffer a bit if you are fully invested. Another important rule is don’t get scared, don’t panic and don’t sell. The stand-off scenario keeps repeating itself every few years. Resilience always waits and wins.
Our current strategy: For existing investments, we may be restructuring to move higher allocation to areas likely to gain immediately from recovery & in 3/6 months post recovery. SIPs continue as usual. For existing debt investments we are moving money into Index funds & equity funds in big chunks. For existing ULIP debt investments we are again moving to multicap equity funds in big chunks. For direct stock investments the liquid money is being deployed into equity markets swiftly. New investments are directly hitting the equity markets. Yes, we are following best principles of investment. Being greedy when others are scared. Investing when markets are down. Holding onto good investments as it is as we do not know at which point there would be a sharp positive turnaround.
Meanwhile, pretty much everything that you are hearing about is correct, be it Coronavirus or Yes bank or GDP falling behind etc. Markets, countries and economies are always in transient state. Follow prudent principles and it always works out as expected.
Kartik Jhaveri
Director – Wealth Management
Contact: 022 – 40024043 / 44 / 45… What’s app on + 91 7977877924