Winter is coming...

Yesterday was FNO closing day.

After huge fall in index over last 10 days, shot covering was a logical outcome, which could have helped market recover.

But Nothing happened.

Market bleeded till the end.

Looks like lots of longs got unwound and many shots got rolles over.

 

What does that mean for investors?

1) Market would continue to fall and may take longer than expected to recover. It could take as long as 10 months.

2) Though many of us expect market to recover the in the speed in which it had fallen, it would take longer to recover due to lack of positive triggers and a series of event risks like Iran Oil Imbargo, state and central election results.

3) While many investors are shocked and worried about these market developments, it is not that bad. Except a dozen stocks which have fallen by 20% to 60%, many stocks have fallen by less than 10% in past one month. 

In mutual funds, Midcaps have fallen by 7%, Multicaps by 5%, Large caps by 4% and balanced fund by 3%.

Now comes the Question - What to do now?

1) It's never too late. Investors in a stock market can book profit where damage is 

less. Not necessary they have to dive in and do it today. But Can take stock and do it in next week or so and use this cash reserves to invest later.

Investors in mutual funds are in relatively safe zone. Their fund managers would realign the portfolio for better prospects. 

2) In both categories, do allocate fresh funds. We knew markets would be volatile. We have seen it in the past. And we have seen them recover too. 

3) Do invest in those stocks and mutual funds when they have meaningfull fall.

4) Invest gradually. Don't dump at one shot.

Stay in touch. We would be happy to assist you as and when required. 

Happy Investing