Even as the Sensex and Nifty plunged once again amid rising global volatility, with the 30-shares Sensex tumbling by more than 500 points to open at 34,002 while 50-share Nifty fell more than 177 points, the investors may be mulling on what should be the strategy going forward, experts caution against hitting the panic button. “What you buy is more important than when you buy. So, it’s not a question of whether you buy 10% down or 10% up,” Basant Maheshwari of Basant Maheshwari Wealth Advisors told ET Now.
Explaining further, he said, “Vakrangee, the poster boy of this bull market, is already down 50%, and it went up 20-30 times over the last 3-5 years. So, 10% high or low makes no difference if there is no exit,” he said.
But what should the investors look to buy now? “Buy high quality companies. Because when the bear comes up along, you will be safe behind quality. Buy companies with strong fundamentals. It sounds clichéd, but it is all the more important in a time like this,” the expert said. While investors may be wondering if this is a repeat of some earlier crisis, experts caution say that it’s just an overdue correction. “ I am absolutely clear in that this is not a 2008 repeat. This is nothing but a normal correction of a vastly overbought equity market globally,” Shankar Sharma of First Global said in a recent tweet.
In a recent post authored by Vishal Khandelwal of Safal Niveshak, the expert notes that the investors must continue to focus on buying stocks of companies with earnings and cash flows. “Predicting the subsequent movement of stock prices, or the next mood swing of Mr. Market, whether he will be in the best of his spirits or worst – is a loser’s game. Focusing on where the earnings and cash flows of the underlying businesses you own, or want to own, are going to go long term is what you must focus on,” he said in a post.
Adding that one’s behaviour and expectations are under one’s control, and so is the amount of risk the individual wishes to take and the time in hand. “Stock prices and future returns aren’t under your control and thus you must leave them at what they do best, that is, fluctuate,” the expert noted.