What to do when Stock Market , NIfty & Sensex are down ? Don't panic and check here.

Hi,

Welcoming you all!

Today I am going to write down on something very important . What to do with your money when stock market is down?
This is a question which panics us all as  our hard core money is at stake and it is very disheartening to see that money has lost its value comparing to the original investment.

Well, first of all, I would like to convey there is no need to panic as this is nothing but the volatility in the market which causes stock market to go up and down. Volatility ( i.e. ups and downs ) is the part of the stock market and people who are investing for a longer period of time need not worry at all.

We all know stock markets never rise in a straight line. There are fluctuations but the end result is always growth.

Sensex got started in 1987 at a base point of 100 and sensex is trading with an all time high of 38000 in August 2018. So, you can imagine the growth here, the money has been grown by 380 times since the sensex has started ( approx 30 years) amid all those crisis, downfalls. Same goes true with nifty as well. So, do not worry at all.

Shall we take out money when market is down ?

Again, this is a question which often comes in the mind of investors , mutual fund investors when markets are down. Well, I would like to share that you need to stay in the market for a longer time and this downfall will disappear. It does not makes sense to book loss when you know the returns will be superior if you stay in the market during this down phase and does not take out the money.

Now, what shall we do when markets are down ?

So, you should invest more and more when you get this opportunity. The reason is simple as stocks are available at a cheaper option and at a discount this time.

For mutual fund investors, which are investing through SIP, can increase their SIP amount or can make some lump sum payment to mutual fund.. This will get them more units as NAV is always lower when markets are down. So, ideally, with same amount of money, you can purchase more units in the down trend as compared to uptrend in the market.

So, when market goes up, you will be surprised to see your money growing and compounding and giving you stellar returns.



So, volatility, fluctuations, ups and downs in the market are your friends. And as a safer rule, always invest that amount of money in stock market, which you dont need for next five years. 

So, when markets are down, please invest more rather than taking your money out to reap superior benefits in the future and sty with the market as in longer run, it is always growth of your money which you will see.

Hope, I was able to understand this issue.

Comments, suggestions and feedbacks are welcomed at hina.gupta19@gmail.com