It’s time to buy gradually as markets fall further. Here is your complete guide from Roboadviso
In this article, we are not going to talk about discounts on Flipkart, Snapdeal, and Amazon or for that matter, on any other brands. Here, the focus will be on stock market – Is it really End of Season Sale in Stock Markets? Well, you will yourself see it once you understand following three things:
– Why the stock markets have fallen so much?
– Will the markets fall further?
– What should be your strategy looking current situation?
Many investors are worried these days over equity market situation. BSE S&P Sensex has fallen around 25% flat from its peak (in January 2015) and similarly for Nifty 50 Index. The Union Budget has also come with lot of hope but time will tell its reality.
Why the stock markets have fallen so much?
There might be many more reasons of the markets fall but one thing was sure. In 2014 and early 2015, markets were trading at huge premium. At least, they were overvalued by 20-25% from their historical averages.
Will the markets further fall?
*Data as on February 26, 2016
From the historical averages, the markets are still overvalued by 5-10%. So, the markets can still fall from here. Still nobody knows the answer perfectly.
What should be your strategy looking current situation?
– Continue with your old investments and SIPs in Mutual Funds assuming all are good funds.
– At every fall of 5% in markets from current levels, buy additional in equity markets.
– Participate through good equity funds and avoid investing directly in stocks.
– If you have under-performing funds (under performing the benchmark), get out of those now and replace them better performing funds, don’t wait for market recovery.