Market is down; everywhere is panic of pandemic COVID-19. Investors are withdrawing their funds from the Market. Is this the right time to invest? Yes, it is. Warren Buffett said, “Be fearful when others are greedy and greedy when others are fearful”. This is the time when you can get good stocks at a very attractive price. Today I am telling you what you should do and should not do while investing in the Stock market. I am also going to share my strategy for the bear market (when the market is falling). How could I manage my portfolio returns more than 15% in this crisis?
In India, retail investor volume in the Stock Market is very low compare to developed economies. Below are the reasons:
1. Conservative nature – Indians have a conservative approach toward the stock market. We don't even try this market. We have more faith in traditional instruments like FD, RD, and Insurance policies.
2. Risk involved in the Stock Market - Share market is risky but full of opportunity. We look only at one side of the coin. Share market is risky when you invest carelessly, without knowledge or with the wrong approach.
3. The stock market is gambling – We look at this market with negativity. We compare it to gamble. It is a gamble when we use the wrong strategy of earning overnight, but when we show the right approach and use our fund by keeping mind long term horizon then it is called investment like any other business.
4. Preference to physical assets – Indians still have a love for gold, silver & lands etc. Many people in India consider investing in Real estate, gold, etc easier compared to paper assets.
5. Lack of awareness – Due to lack of awareness, people have no proper idea about the stock market. How it works? How to open Demat? What is the difference between Demat and Trading Account? How to pick good stocks etc. They consider it a bit of a mess. However, nowadays it has become easier and you can get all services like Demat account opening, stock-picking advice etc just by sitting on your couch.
Things to remember while investing in Stocks in Bear market1. Invest in only Debt-free and fundamentally strong stocks: In bear market always invest in Debt-free or less debt stocks. No need to invest unnecessarily full of debt stocks while you may get fundamentally strong stocks at a very attractive price. In this kind of economic slowdown, only strong players survive.
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I hope this article will be helpful. If you have any doubt or queries feel free to write us.
Disclaimer: The views and investment tips expressed in this article are my own. I advise users to consult with certified experts before taking any investment decisions.