The Do's and Don'ts for Investors during Stock Market crash.
The Indian equity market is currently subjected to a Continous fall and is accompanied by a sharp correction amidst innumerable macro and micro factors as well as other market related concerns are making the equity markets of India to face a bearish face of continuous downfall.
- The Rising crude oil prices.
- Weakening of the Indian currency against the dollar.
- The current account deficit and fiscal deficit.
- The trade war between US and China.
- Activities by the market drivers i.e the institutional investors (FII, DII and MFs).
- Non Banking Financial Company (NBFC) crisis.
- The IL&FS crisis.
All these concerns are the factors of the current bloodbath in the Indian equity markets.
The stock market is prone and exposed to volatility (the ups and down in the markets). The fluctuations are common when it's comes to stock market.
In the past, The benchmark index, sensex has fallen more than 2000 points in just few days. In just a period span of 5 working days the market eroded around 10 lakh crore of the investors. The nifty is also standing on the same footing of the downfall.
Now, there is no doubt that when the markets are prone to such volatility, sharp correction and continous downfall(currently referred to as a market crash).
Investors like you and me are likely to become fearful in the current market scenario.
But the time is to remember the wordings of legendary billionaire investor Warren Buffet.
![]() |
Warren Buffet |
Warren Buffet said " Be Fearful when others are greedy and greedy when others are fearful.”
It is a natural phenomenon and a common psychological behaviour of the investors to get discouraged about their investments, when their investments are subjected to poor performance because of badly performing markets.
Of course, fear is natural because ultimately it is the concern of the hard earned money that you and me earn.
Now without "beating about the bush".
Let me give you a glimpse of some do's and don'ts that an investor should take care of during the market fall.
The Do's and Don'ts for Investors during Stock Market crash.
1.Don't make wrong decision.
You must not hazard to take emotional decision amidst the volatility of the market.
Don't panic to sell out your investments.
Don't let fear conquer your intellect and thereby consequently leading you to make a wrong and irrational decision.
Avoid the herd mentality you must not sell your investments by just seeing others or the crowd because in sharp correction market all are selling.
You must stick to the fundamentals of your selected stock.
Analyze the reason of the downfall and why is your stock beaten down by the market and after evaluating the pros & cons take your investments decision.
Evaluate your stock in three ways.
- If you are clear of the soundness of the company's strong fundamentals then you must stay invested because time will ultimately heal everything and the markets will improve.
- Consult your financial advisor before you take any decision in the hustle and bustle of the markets volatility.
- Do not forget to look at the valuations of the stocks and the fundamentals of the company.
In short, neither you should follow the crowd mentality nor you should sell your stocks based on the current headlines in the market by ignoring the fundamentals and the purpose of your investment.
2.Start or stay invested through your systematic investment plan (SIP).
You must strictly stick to your investment goals and must continue to save more and invest more hunting for quality stocks.
While, In this falling market. It will be very opportunistic to buy more unit or increase your investment corpus i. e. investing more because the valuations will be attractive.
Don't forget the theory of a value investor.
Don't forget the theory of a value investor.
![]() |
Finomenal Wealth |
Your investment amount might have shrunk because of the underperforming markets and to cover up your loss you need to do bottom fishing (buying stock at cheap valuations).
Saving and investing more.
So, when the market cycle will take turn the stocks will improve and the stocks will rebound and their prices are likely to go up and when this happens you will be standing on a benefiting edge and will definitely reap benefits from the market.
Same happen, After the financial crisis of 2008 -2009 and downfall of 2011, when markets improved.
So, when the market cycle will take turn the stocks will improve and the stocks will rebound and their prices are likely to go up and when this happens you will be standing on a benefiting edge and will definitely reap benefits from the market.
Same happen, After the financial crisis of 2008 -2009 and downfall of 2011, when markets improved.
Investing at the time of corrections will help you to reap the benefits when the markets rebounds and revive from the fall.
If you want to get benefit from the power of compounding stay invested for long term and of course equities outperform every other asset class in long term in terms of stellar returns.
![]() |
Finomenal Wealth |
3.Differenciate between 'risk' and 'volatility'.
Investors generally mistake 'risk' and 'volatility' to be the same side of the coin.
But actually they are not.
But actually they are not.
Let me dive deep into the concept.
Risk is the uncertainity, possibility or the chance of injury loss or any hazard.
And in financial terms risk refers to the loss of money.
And in financial terms risk refers to the loss of money.
While volatility is the fluctuations(the ups and downs) of the markets rapidly and significantly an investment tends to change in price.
Equities/stocks/shares are volatile investing instruments and are likely known for the fluctuations because of number of driving factors.
Volatility does not imply risk. Volatility does not means the risk of losing money.
Volatility is a short term scenario. Volatility can only be harmful if you are a short term equity investor.
If you are a long term investor you can beat volatility and can gain from the markets with a long term horizon.
Volatility is a short term scenario. Volatility can only be harmful if you are a short term equity investor.
If you are a long term investor you can beat volatility and can gain from the markets with a long term horizon.
4.Do not blindly invest just because you are getting cheap.
Remember cheap valuations does not always means a value buy or it will benefit you, buying only because you are getting cheap is not a good idea. You must only buy those cheap stock which are worth of investment with strong fundamentals and future growth.
Do not buy loose fundamentals stocks otherwise you loose more money.
Do not buy loose fundamentals stocks otherwise you loose more money.
At the times of the sharp correction in the markets the stocks prices falls drastically and the valuations becomes cheap as well as look lucrative.
So don't hazard to get lured by cheap and eye-catching attractive valuations of the stock and should always invest based on various factors.
- The fundamentals of the company.
- The track record of the company.
- The financial performance as well as the financial position of the company
- The quantitative and the qualitative factors.
- The Quality management.
Conclusion
![]() |
Designed by freepik |
The rise and fall in the stock markets is driven by many factors and volatility,sharp correction and downfall is temporary.
Investors must not hazard emotional, uninformed or irrational decision when it comes about their hard earned money.
Take wise decision, find opportunities in the markets. Invest in stocks with strong fundamentals and future growth and have a long term investment approach.
Authored By :
Founder of Finomenal Wealth.
28 Comments
Good post:)
ReplyDeleteThanks a lot ☺☺
DeleteInformation is very informative also you can click nexter.org/ ,and get such type of info, this is the great resource to get such type of information.
ReplyDeleteThanks a lot .......😊😊😊😊
DeleteThank you for the post and it is very interesting to read. We can also learn in such places like Share Market Courses in Mumbai for the bright future.
ReplyDeleteAdorable and Great blogs, they all are I also read blogs of they all those are very informative and important. Thank for sharing!Visit here>> Epic Research
ReplyDeleteGreat article thanks for sharing this kind of information. We are providing best FUTURE TIPS in Indore and secure your investment with us and that uses composite stock future tips in Indore to allow investors to speculate on the performance of the entire market, or to hedge against losses in long or short positions. The settlement of the contracts is in cash in index future.
ReplyDeletei am read this article again. these really good and important.more visit >>>Epic Research
ReplyDeleteGreat idea! i think stock market is one of the best option to get positive range of return on investment. Share Brokers in Coimbatore might be the experts to give the best kind of brokerage services.
ReplyDeleteThis post has really given a great idea on the concept. Thanks to the author of this blog for sharing.
ReplyDeleteSpoken English Class in Anna Nagar
Spoken English Classes in Chennai Anna Nagar
Spoken English Class in Perambur
Spoken English Classes in Anna Nagar West
Spoken English Classes in Chennai
Best Spoken English Classes in Chennai
Top 10 Spoken English Classes in Chennai
Spoken English Class in Chennai
Spoken English in Chennai
English Classes in Chennai
Nice blog!! I hope you will share more info like this. I will use this for my studies and research.
ReplyDeletePHP Training Institute in Chennai
Best PHP training in chennai
Ethical Hacking Course in Chennai
PHP Training in Chennai
Web Designing Course in Chennai
PHP Training in Chennai
PHP Course in Chennai
Thanks a lot 😊😊
DeleteThanks for this wonderful post, I want to become a trader. Now I'm in Share market courses in Mumbai. They guide me very well.
ReplyDeleteAmazing article, Which you have shared about the stock market. This article is very interesting and I liked to read it. If anyone want to know that how to invest in stock market , then visit Investing in stocks for beginners
ReplyDeleteThank you for sharing the details about the stock market.
ReplyDeletestock market courses in delhi
Stock Market Institute in Delhi
Share Market Training in Mumbai
Share Market Courses in Mumbai
Share Market Classes in Chennai
The FTSE 100 index is made up of the top 100 LSE companies in terms of market cap as calculated on December 31 of the year. Know more information about UK FTSE from our website.
ReplyDeletesdf
ReplyDeleteGreat Post! thanks for sharing useful information with us. If you want to know more about this topic, then click on the below links.
ReplyDeleteThank You!
Currency Trading
Equity Market
Forex Trading
Forex Market
It's very interesting, Thanks for sharing a valuable information to us & Knowledgeable also, keep on sharing like this.
ReplyDeleteStock Investor provides leatest Indian stock market news and Live BSE/NSE Sensex & Nifty updates.Find the relevant updates regarding Buy & Sell....
ShareTrading
Demat Account
Currency Trading
Online Trading
Thanks for sharing. It very useful and great blog for eachone.
ReplyDeletePlease click here if you wish to receive further offers from us:
Foreign Exchange Market
Financial Market
Currency Trading
Currency Trading
Nice Article. Thank you for sharing the informative article with us. Stock Investor provides latest Indian stock market news and Live BSE/NSE Sensex & Nifty updates.Find the relevant updates regarding Buy & Sell....
ReplyDeleteequity shareholderes
tax in india
Great read! As usual helpful always.
ReplyDeleteThanks for sharing your valuable information. But i have a quation. How can I make money with stock trading?
muthoot forex
phoenix mills share price
beml share
phoenix mills share price
tata investment share price
nse berger paint
equitas
nse berger paint
Great Information! Its looking Nice.....
ReplyDeleteYou can invest in stocks yourself by buying individual Stocks & Shares or mutual funds,IPOs, or get help investing in stocks by Visit stockinvestor.in
phillips carbon share price
shakti pumps share price
ramco industries
mahindra amc
bajaj electricals share price
kolte patil developers ltd
sbi insurance
bsesensex
Unfortunately, many people, who are going to invest, don't even pay attention on these aspects. Thus, most of them make a lot of mistakes.
ReplyDeleteNot making instant decisions and always think about what you are doing is a great piece of advice that will save you a lot of nerves.
ReplyDeleteIn such a dangerous period, it’s important not to lose what is and you can even try to make money in such a situation, because then, as a rule, ask us about essay writing everything comes to calm and those who manage to react clearly get a good income.
ReplyDeleteThanks for sharing. Really useful information and it’s a great article with good resources. Checkout our Stock Investor website for more latest stock market update.
ReplyDeleteBharat Bhushan Finance & Commodity Brokers Share Price
Bharat Bijlee stock price
Bharat Dynamics stock price
Bharat Electronics stock price
Nice article. stockinvestor.in shares information related to stock market like stock market analysis, advices the tips to invest in stock market and also provides stock market recommendations.
ReplyDeletecompanies
shares
Equity shares