By the end of the trading session, the Sensex had crashed 1,600 points, the most ever in absolute terms. Jhaveri, however, maintains his stand. “Most investors are sitting on huge profits. So, there is no need to panic.”
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He is correct. Despite Monday’s sharp fall, the Sensex is up 44 per cent since the beginning of the rally in September 2013. And, the S&P mid-cap and small-cap indices are up 96 per cent and 104 per cent, respectively.
In other words, in less than two years, investors have made a significant amount of money by investing in stocks. So, there is little reason to be disappointed or upset with the past week’s fall, especially Monday’s.
Experts say the way forward is to stay put. “We need to be sane about the whole thing. While I will not pump in fresh money into the market immediately, I will not sell either. Let’s wait for a couple of days, at the least, to see how things pan out. Accordingly, a decision can be taken to buy,” says Jhaveri.
Many say while it might be a good time to buy, one should wait for a few days. “Typically, such situations do not last for more than three-four trading sessions. So, investors need to wait it out and then start buying good stocks,” says Arun Kejriwal, an investment expert.
He added by waiting for a few days, one could end up buying a stock at a higher price, if the market rebounded. But this wouldn’t hurt the investor’s prospects. And, one should invest in tranches because each fall would offer more opportunities, he said.
Those already in the market needn’t rush and sell even if they are sitting on profits, as the Indian economy is faring well and might not be significantly hurt by the developments in China, experts say. If you have systematic investment plans, continue with those because such corrections allow you to buy more units of a mutual fund scheme.
Also, these additional units will improve returns substantially in the future. If you are looking to start a systematic investment plan, this could be a good time.