Instead of panicking looking at the recent stock market crash, this can be your opportune moment to create some long-term wealth. Here's how...
Globally, stock markets have been sliding to multi-year lows as the fear of recession grips the investor community. Since China and the US are big markets, any correction there is bound to create a ripple effect on the Indian markets as well. So far, 2016 has been quite negative and fearful for Indian investors. Here's how you can play out your investment strategies to make the most of this market crash.
Is this the time to review my investment portfolio?
Ideally, investors should not look at stock prices and markets on a daily basis, and should stay away from the vagaries of markets movements. As long as you've paid a good bargain price and the company you've invested in hasn't changed dramatically, there is no need to worry.
Should I invest now?
Although it may take some time for the markets to stabilise, if you are sitting on cash or have invested surplus money in fixed deposits or other fixed instruments, then you should definitely use this opportunity and invest at regular intervals. The key is to deploy your money gradually in the market via mutual funds or direct equities.
Watch out for that rally
It has been seen earlier that whenever the markets have corrected beyond reasonable valuations, mostly on the back of external factors, it had always provided with a great opportunity for long-term wealth creation. I would call this a blessing in disguise for investors to make money. Make sure you don't miss the rally, which usually comes after every big correction in the markets.
What about existing investors, whose valuation is in red?
As I mentioned earlier, as long as the inherent strength or fundamentals guiding the individual stocks or mutual funds you’ve invested in, have not changed dramatically and they're a part of your long-term financial planning, there is no need to worry. In fact, you should sit tight and invest more to even out the losses. Use the market volatility as an opportune time for investments by accumulating more carefully-planned stocks or mutual funds (through SIPs).
Rishabh Parakh is a Chartered Accountant and the Chief Gardener & Founder Director of Money Plant Consulting, a leading Tax & Investment Planning Advisory Service Provider. He also runs a personal finance blogcalled “Mango Investor” aka AAM Niveshak at www.mangoinvestor.com. Readers are invited to send their feedback to rishabhparakh@moneyplantconsulting.net.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
 "Representational image")
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}