INSUBCONTINENT EXCLUSIVE:
It is painful to see a long-term investment portfolio fall like ninepins
The latest selloff since August-end has eroded around Rs 17 lakh crore of equity investor wealth.
The Market is one of the best teachers
It teaches investors how to rein in the seven deadly sins, including greed and envy.
According to ace investor Vijay Kedia the biggest
not want to become a crorepati overnight in the stock market.
Kedia also says the market tells us why one should not clone portfolios of
pour lesser amount of money in a non-performing stock compared with other stocks in my total portfolio
At the same time, investors who follow me may put most of their wealth in that stock
One should first understand the principle, not the scrip
investors to go for long term, as there is no surety of return in the short term
is a liar.
Kolkata-based value investor Abhishek Basumallick said usually, such steep corrections come after a big rise
Calendar 2017 was one such period when money making became very easy
Greed was the dominant factor
Then inevitably the market does crash and people get trapped, like a deer in the headlight
By the time they muster the courage to do something, the market has fallen further and fear grips
also understand that it is the nature of the market to rise and fall
There have been such falls in the past and will happen in the future as well
But every time the market has recovered and gone on to record new highs
The market correction of 2008 was one of the worst
However, all those who remained invested and picked up good stocks during the correction are sitting on humongous gains since then
Ekansh Mittal, Research Analyst, Katalyst Wealth, said market movement is like a pendulum; it keeps swinging between extremes
In 2017 and early 2018, smallcaps and midcaps were approaching higher extremes and now smallcaps and midcaps are approaching lower extremes
at stock prices continuously
Once you have decided what to purchase, make the investments and close the terminal
By continuously watching, you cannot obviously hold the stock prices from falling further
However, you can avoid panicking and maintain rationality.
Lastly, one should respect valuation multiples.
Markets traded at higher
valuation at the beginning of this year
Price-to-earnings (P/E) ratio of the benchmark BSE Sensex hovered around 26.40 times on January 29 against its 10-year P/E multiple of 19.40
times and five-year average of 19.90 times
The index was hovering at P/E of 23.50 on October 5 against a 10-year average P/E of 19.60, still indicating over-valuation
