How Investors Should Deal With The Current Stock Market Situation?

 

With testing times of the pandemic re-emerging, the utmost need for alternative sources of income for individuals such as stock markets has also re-emerged; as their jobs may again face the same risk. If people either master this skill or get connected to an experienced and learned expert/ firm or Stock Market Advisory Company, they can open doors for tapping into a source of passive income through investing which will prove to be sustainable in the long term, unlike trading. But with the markets continuously slipping in the past 2 weeks, unseasoned Stock Market Advisory firms and investors have come into fear. So how should investors deal with the present scenarios?

Concept of Investing:

An investor is a person who puts his capital or money into equity or primary/secondary markets to get profits in the horizon of 1 year or more; in which dividends become an additional source of income. An investor buys when he feels that his prospective stock is undervalued or an investing tool gives a buy signal. He/ She has to decide his/ her investment horizon first, even before investing. Depending upon the horizon, here are the two broad classifications and their respective action plans:

• 1-3 Years: This category of investors is on high alert, as a crash or correction may result in eroded profits or even loss. They need to revisit their strategy for investment and sell their holdings as soon as the sell signal arrives as per their setup. Some of the seasoned investors use Fib levels or PE Ratios while some use Moving averages. They can use that for squaring off holdings and then reinvest as per the setups. This methodology is ideally suited for beginners or those who have a small capital.
  
  
  
• 8 Years or more: In the long term, markets are always on the uptrend. So those who're invested for the horizon of 8 years or more, corrections won’t matter a lot. Prime examples of such investors and their styles are a replica of big fund holders like Warren Buffet or Rakesh Jhujhunwala. They invest with such a big capital that there’s no relevance to selling, rather they perceive and wait for opportunities of correction as increasing holding quantity.
  
  
  

Depending upon your capital and your investing ideology, you have to take action in the recent markets. If you’re relatively inexperienced in the domain of stock markets and/ or are afraid of the current scenarios, you have just started to witness the other side of stock markets which you can tame with the help of experts of a Stock Market Advisory Company. With the experience of the past crashes and the analysis done by Stock Market Service Providers, you’ll be able to get a suitable course of action for yourself.