Sale in Sensex

The current fall in Sensex indices was seen by many market investors as a blurred memory of 2008 decline, where all the bets including good blue chip companies were falling flat. It is due to this reason that investors are wary to make any movement. As for us,we received calls from many of our clients and long term investors if they should do anything, in particular should they square off their position in line with the deteriorating market situation.

Keeping in mind those calls and other frantic news, today we would like to reiterate a few things on this situation. Let me explain you with a simple example, we witness at every season end a general sale across all brands. It could be either in electronics, clothing or even in some services. It shouts discount as high as 50%. So, what do we do when we read such news? Do we worry that something is amiss in this company that is why this sale or do we think that the item on sale is defective. We do not consider buying it. No, none of these things cross our mind. We take it as a good opportunity to buy some of our favorite brands which were otherwise expensive to buy. Even in sale we select as per our preference. Although, if the deal is really lucrative we might even get some average things or not so important things in our buy.

Similarly, consider the fall in market as something bound by external forces, although not necessarily seasonal but bound to happen. It might be due to bad company performance, declining interest rates or bad credit market. Any if these or other factors accompanied by strong external policies, could be the reason for falling stock prices. If the entire economy is affected by any particular announcement like GST bill or FDI investment in any particular sector, it is futile to distrust your investment.

So,as we have maintained in past, the only probable action in this lowering market is to buy. Although, this is our personal generalized advice, we maintain that buying in dips always helps to average out the cost price. Also, it is necessary to identify the lows from your purchase price. Don't try to ape the action of the short term traders, who only fuel the decline in stock price. 

Remember investment is a long term game and should be always viewed for over a period for comparing. SO, don't be wary of these small waves in the sea of investment and continue your journey with confidence and discipline.