Covid-19 has created one of the greatest crises in recent times across the globe, and equity markets are falling, irrespective of the value or performance of a stock. It is common in uncertain periods for some people to feel that it is better to get out and come back once the chaos comes under control.
Those who sold by the last week of February, either by choice or by chance, are lucky. In the past 20 years, there were six corrections at different points in time, and investors who behaved rationally had ample opportunity to sell after the onslaught of correction. That’s because the market spiked in between corrections.
I’ve been in this industry for many years. I spoke with leading fund managers over the past one month. Everyone was surprised by the way the market went for sell-off. Some of the big names have corrected by 35-50 per cent in the past 45 days.
They are confident that this is an opportunity to invest over next 1-2 months for good return when the market will bounce back.That is why the domestic institution buys are equal to the FII’s sell-off.
Like you, I also don’t know the bottom, even though every day I read the technical chart shared by someone whom I trust.
So, my submission for everyone is that in the past six corrections, the market bounced back substantially — ranging from 50 per cent to 100 per cent once the fear subsidized.
Be patient. You will get the reward since we have followed asset allocation and invested based on your goals.
Still, if you require money, don’t rush to sell and invest in 6 per cent return. It is better to take a loan against mutual fund to meet immediate requirements.
I am here for any help you require tontide over the situation.