Lessons learnt through Market consolidation after budget 2018.
Nifty is at 10430 now. Nifty has hit all time high of 11,171. It had hit a low of 10,276 in last 30 days. It is almost 9-10% off highs now and 5.3% down in last 30 days. Similarly, Small cap Index is down 12.5% in last 3o days and Mid cap Index is down 10% in last 10 days.
Did you know?
I had warned of market correction on 16th of January 2018. Click here to read it.
NIFTY is there right now!
I know, now its of no use, if we are holding stocks with our portfolio down 10-15% from the highs. But we can always learn from our mistakes and make sure it does not happen again.
- Correction happens across the market.
- Correction % depends on the Market cap of the stock. Lesser the Market cap deeper the correction. It does not matter on the quality of the stock. Always diversify across various market cap.
- If you feel that a correction is anticipated, increase weight-age towards large cap stocks. If you feel that the correction is over, increase weight-age towards small cap stocks.
- Holding Fundamentally good stocks will always rewards. Deep corrections provide a good opportunity to add more shares at cheaper price. Time to hit target takes little longer.
- Never invest 100% in the market. Always plan to infuse small funds every month. It will help you capture risk of volatile movements in the market and the correction too.
Invest across different Market cap & across sectors. Hold good quantity of quality stocks. Never panic in the market. Sell and buy of a good reason.
Avoid both the following,
“Market is crashing, I should sell!”
“Market is racing, I should buy now or I can never buy!!”
Buy stocks with a target in mind, Target should be either Fundamental or Technical, it should not be an intuition. Book profits often. Happy investing!
Will be right back with Long term investment strategies that actually works in a fresh article.