Stock Market crashed. What should you do?
In this stock market crash, Sensex fell by 1189 and nifty was below 16650. First of all, don’t panic, and sell your stocks at a loss. When the stock market is seeing a bull run, it will see a bear run too. You can see the history of the stock market, you will see a bull run complimented by a bear run.
We have a lot of these kinds of stock market falls in history The Panic of 1907, Wall Street Crash of 1929, the black Monday 1987, Japanese Asset Bubble Burst 1992, Asia Financial Crash 1997, Dot.com bubble burst 2000, Subprime mortgage crisis of 2008, Covid crash 2020. These are some of the major dips that the stock market has seen, but there are a lot smaller dips in the stock market which also creates a panic.
Why is this happening
After a few months of covid, the market was still up because and some big investors said India is in the bull run, and a lot of new investors invested without even having much knowledge about the stock market. This is where most retail investors made a mistake, they have to understand the market and not blindly invest in it.
The hype of Sensex hitting 75k was created and most of the investors believed in this, but this was a bubble, and the bubble always burst. This time it was the omicron variant of covid that led to the stock market crash. The overall Asian market has seen a dip.
What should the retail investor do?
Just don’t start pulling the money out now, as that would look like the right option, because if you do that the market is going to fall further and you are only to get more losses. This kind of situation is where you need not panic and have patience and just hold on to your investment.
If you have invested in bluechip companies do not pull your money now.
Here are a few tips that will always help you stay alert and avoid panic.
Tips to avoid stock market uncertainty
- Understand what is a stock market before you put in the money, do not listen to any quick tips
- Do not borrow money to invest in the stock market
- If you are a new investor, do not invest in IPO or companies that you do not know
- Always invest in bluechip companies and hold it for the long term (3-5 years)
- Always diversify your portfolio, never put all your money in one company or sector.
- Invest in mutual funds, a safer way to invest
Conclusion
- For an average investor stock market holds quite a huge risk, and on top of that if you do not study and invest you are risking even more
- An investor needs to understand that the stock market is highly volatile and any small change can cause the price to rise or fall.
- If you have the risk-taking capabilities and have money to spare then a stock market is a good place for you to earn money.
- This doesn’t mean that people who have less risk-taking capabilities should not invest. You should always study and gather information before you invest
Hope you stay calm in this crash and do not do a panic sell. And try to follow the above tips to avoid stock market uncertainty
