What should you do when the markets hits the bottom
Markets are volatile. An up swing is followed by a downward trend. In this scenario you may wonder how safe is your investment? Moreover if you should at all invest at all? What are your options as an investor?
The glass is always half full. This isn’t just from the point of view of an optimist but very true indeed. Look at life that way and the entire life changes the way you look at it. Great talk but how is it applicable to markets and how does one save from a downward spiral? Downward swing or a bear phase isn’t as bad as it is made out to be. It’s one of the best times to buy undervalued stocks. It’s also the best time to pick up stocks that on an upswing are likely to go up.
Investment is never a 1 day or a 1 week game. Investment happens over a time. Short term can be from 1 to 6 months. Medium from 6 months to 1 year. And long term can be 1 year upwards. The right approach is to
- Buy stocks that are undervalued when the market hits a bottom
- Hold your existing stocks and don’t sell them. Remember after hitting the bottom it likely to rise anytime soon.
- Research on market trends to get an idea where the market is headed
- As a small investor refrain from investing in futures and options. The risk is too high and you may lose it all.
- Instead invest in stocks that offer medium to longterm value.
- See the dividend the stock has offered over the years
Investing can be safe and a very enjoyable exercise provided you do it rightly. Just some basic safeguards and you as a small investor can be sure you will get your returns.
