MANAGING STOCK
MARKET VOLATILITY
Every
investor desires to earn money from the share market, which is known to have volatility, on and off. The reactions of different persons to this volatility will be different. An article in Dalal Street magazine of Feb 08-Mar 02, 08 discusses right ways of handling such situations. There are rises and falls in the Sensex, sometimes even steep. Whenever there is a big fall, returns from the equity are substantially reduced. Some people think that they should have sold the shares, when it was at its peak. But the investor must understand that it is impossible to predict this up and down movement, whether at long term or at short term level. Such movements are a part of the stock market. Equities give good returns on long-term basis. We must ignore such happenings at short term level. The group of stocks taken by us should be of good
quality i.e. of right mix, so that
success is constantly achieved. In case we invest on the basis of some short term
performance of a stock, we will land in problems later on. Seasoned investors and new investors will take such volatility differently. We should not be afraid of negative views and headlines. Investment for about 3 to 5 years is required for getting benefits. As we get money for investment, we should add to our list. We should follow some regular investment programme so that we can also reap from our country’s growth. Finally, it is the right proportion of quality funds and patience, which will be beneficial to us in the long run.
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