Find an investing opportunity every 60 seconds!
Get SMS to get the App Link
Tap here to access menu...
Tap here to Pull quick market snapshot...
Tap here to open an account...
Welcome to our brand new version...
Download our
RING Mobile App NOW!
Advantage AxisDirect
Quotes
Back To Menu
AxisDirect-O-Nomics
Oct 15, 2018 | Source: www.timesnownews.com
The volatility in markets has made investors cautious which is prompting them to sell their shares before the prices dip even further. When the market is going through such a volatile phase, investors panic and often take decisions which makes them lose out on a lot of money.
It is extremely important to not take any knee-jerk decision which can cost you in the long run. Selling stocks prematurely is just as bad as holding onto depreciating shares for a long time as it can make you lose out on great potential returns. If you are not sure about what to do, here are five things you should not do when the market is volatile.
Financial plan and SIPs: A lot of people stop their SIPs when the market is not performing well because they fear that their investments will not provide then good results. This is something one should absolutely avoid. SIP stands for Systematic Investment Plan which requires you to invest consistently in order to reap the returns but if you stop your SIPs, you will not be able to enjoy the benefits of compounding and lose out on good returns. It will also disturb your financial plans as well.
Panic: It is natural to panic when the market is volatile and the shares are losing value. A lot of people panic so much that they make the mistake of selling their stocks prematurely and miss out on good returns when the market rebounds. If you know exactly why you invested in a particular stock, hold on to it and wait for the shares to rebound but if you are not sure about your investment, take advice from financial planners or investment experts before pulling out. Selling stocks without proper though can cost you money.
Portfolio Diversification: Market volatility is not as harmful to those who have a diversified portfolio because it is very rare that all the sectors are performing badly, simultaneously. If your assets are spread across different sectors, chances are that you won't bear the brunt of market volatility as much as those who put all their eggs in one basket. Make sure that your portfolio is diversified but not over-diversified because over-diversification leads to minimal returns, which is not advised.
Buying: It may tempt some investors to buy stocks when the market is volatile because the share prices are low but there is no guarantee that the company whose shares you bought, will perform well. Always look at the past performance of the sector and companies before you buy a share. A lower price might be tempting but it can make you lose money if you end up investing in a poor performing asset.
Investing borrowed money: It is an advice which every investor should follow. Never invest borrowed money into the market as it can land you straight into debt. Many brokers encourage people to invest borrowed money as it can yield high returns but there are chances of huge losses as well which is why it is always safer to never invest borrowed money into the market, especially when the market is volatile.
Equity Market
Derivatives
Volatility
AxisDirect-O-Nomics
Equity Derivatives