Much Needed Market Correction

So today Indian stock exchange both Sensex and Nifty is down by almost 2% which is the biggest market crash in the last 7 months. Not only today but the Indices are going down from the last one week and it is almost down by 4% in a week.

PC: Pixabay.com

I think it is a healthy correction because with this the new retail investors should come in terms of the reality. We are seeing more and more people are investing in IPO in order to get some handsome returns in like 7 days. But is not the case with all the IPO's. Recently we had a PayTM IPO which was down almost 30% from its issue price. I am not saying investing in IPO is bad, I do invest in IPO whenever there is a good issue with the good price. The problem with some new IPOs is that the issue price seems to be quite high and it's not as per the reality and most of the retail investors fell for this.

Now coming back to the correction, I guess it is a good correction and people who are waiting for getting entry to good stocks can use this opportunity to get some stock at cheap prices. In my case, I have shortlisted some of the stocks which I am going to buy this month only after seeing how the market behaves in the coming days. I am not going to catch the falling knife and I can wait for some time for the market to get stabilized.

I think one of the reasons for this correction is the expensive valuations of certain stocks. People who have seen their stock prices skyrocket are actually taking out profit for reasons like High Valuations, Rising Covid Cases and Lockdowns across countries. Also since the Government has repealed the Farm Laws on Friday, the market crash is seen as an effect of it. I think investors are against this move, but who knows.

As said earlier, as long term investors this decline shouldn't matter much for us. These dips can be seen as an investment opportunity or at least entry points to some of the good stocks to build your portfolio. If you are still uncertain about the valuations of your stock then you should buy Mutual Funds and thus enjoy the profit in the long run. For me, I will be watching the market for some time and in the meantime, I will be moving some of my debt funds to the equity fund to get the market dip benefit.

Posted using LeoFinance Mobile