Should You Exit Or Stay If The Markets Correct Some More Now?

Exit Or Stay Market Correction

The present affairs of the stock markets hog the memory of me of the debut roller-coaster  ride at my school trip to a theme park. The minute I saw the ride, I was longing to get on it.  Desperately waiting for the long sequence for my turn along with my mates. Leveraging my  excitement, the shouts of others on the roller-coaster with both hands raised in the air. 

Finally, as the roller-coaster picked up speed, I started feeling giddy, had butterflies in my  stomach, and felt like puking. The joy rides soon turned to horror and I closed my eyes. Others  were enjoying it except me because of the roller-coaster which takes unexpected  twirls and twists.  

Similarly, the stock markets are subject to unforeseen ups and downs. Experiencing years in  the markets, we can still witness many investors reacting the same way I did experiencing the  three-minute journey on the roller-coaster. When the market shows the initial sign of  correction, investors panic and sell off their investments for a loss be it big or small like there  is no tomorrow. As a kid back then, it was okay to think illogically of jumping out of the ride. What surprises me the most is that even grown-up investors are acting irrationally when the market corrects despite investing in good performing stocks. 

And these are the same investors who come back to invest when the flow reverses or abandons altogether and blame the market for their losses. So, the question here is, should the investor exit or stay if the markets correct more now. The fact that volatility is a market trait, but  any investor doesn’t need to worry if it follows below mentioned approaches. 

Firstly, invest in fundamentally sound companies as they are not immune to market corrections.  Such companies are the first to recover and outperform when the cycle changes. 

Secondly, be a retail investor with long-term goals and the reason one invested in equities in  the first place. Markets fluctuate wildly during the short term but are generally stable over the long term.  

Thirdly, market correction is an unexpected opportunity, quality stocks are available at  discounted prices. Think of it as a discount sale at your favorite store when you buy more. 

Last but not the least, humans are full of emotions. Every investor who invests in equities must understand, markets do not go up continuously in a straight line. There can be temporary  hurdles in the short term. 

In the past, the markets have rebounded in a big way after every downturn. So when you invest  for the long term, the returns will average out. The secret to become a successful investor is  to remain invested during the volatility, just like holding tight while you’re on a roller coaster  ride.

Pros and Cons of Investing in Stocks

Pros and Cons of Investing in Stocks

Investing Stocks Market Trading
Investing in stocks means owning a share of the company. This gives ownership rights and shareholders have right to vote....
Read More
Today’s Stocks Market Updates (06 October 2022)

Today’s Stocks Market Updates (06 October 2022)

Market Update Stocks Market
VALUATIONS SENSEX PE Ratio 25.09 NIFTY PE Ratio 20.93 Source: NSE and BSE BSE SENSEX58222.10      +156.63     +0.27%NIFTY 5017331.80         +57.50     +0.33%NIFTY...
Read More
What is Exit Load in Mutual Fund?

What is Exit Load in Mutual Fund?

Investing Mutual Funds
If you are someone wanting to start off an investment journey, you will come across people suggesting you to go...
Read More
Today’s Stocks Market Updates (04 October 2022)

Today’s Stocks Market Updates (04 October 2022)

Market Update Stocks Market
VALUATIONS SENSEX PE Ratio 22.47 NIFTY PE Ratio 20.86 Source: NSE and BSE BSE SENSEX58065.47      +1276.66     +2.25%NIFTY 5017274.30        +387.00     +2.29%NIFTY Bank39110.10  ...
Read More
Today’s Stocks Market Updates (03 October 2022)

Today’s Stocks Market Updates (03 October 2022)

Market Update Stocks Market
VALUATIONS SENSEX PE Ratio 21.90 NIFTY PE Ratio 20.39 Source: NSE and BSE BSE SENSEX56788.81       -638.11     -1.11%NIFTY 5016887.30        -207.00     -1.21%NIFTY Bank38029.70  ...
Read More
What are Hedge Funds?

What are Hedge Funds?

Investing Mutual Funds
Hedge funds are still in their early stages and are not as well known as other types of mutual funds....
Read More
Today’s Stocks Market Updates (30 September 2022)

Today’s Stocks Market Updates (30 September 2022)

Market Update Stocks Market
VALUATIONS SENSEX PE Ratio 22.25 NIFTY PE Ratio 20.64 Source: NSE and BSE BSE SENSEX57426.92       +1016.96     +1.80%NIFTY 5017094.30        +276.20     +1.64%NIFTY Bank38631.90  ...
Read More
Today’s Stocks Market Updates (29 September 2022)

Today’s Stocks Market Updates (29 September 2022)

Market Update Stocks Market
VALUATIONS SENSEX PE Ratio 21.79 NIFTY PE Ratio 20.08 Source: NSE and BSE BSE SENSEX56409.96       -188.32     -0.33%NIFTY 5016818.10        -40.50     -0.24%NIFTY Bank37647.80  ...
Read More
Is SIP Safe?

Is SIP Safe?

Investing Mutual Funds SIP
A Systematic Investment Plan, popularly known as SIP, means a facility offered by mutual fund companies to investors. This type...
Read More
1 2 3 19