Do we really have to worry about the recent market fall?



Let’s try to understand what happened in our markets from an average investor’s perspective. If you ask an average investor he would say India as a market was trading at a very high premium till recently and in this kind of scenario everything is dependent on liquidity coming in. That’s right but if we try to understand the psychology of the investors we will find that domestic investors are bit pessimistic about investing at high level while the FIIs or foreign players are not. FII’s pumped in money as they became more confident in the India growth story.

Everything was going smoothly and then we heard new words like Credit concerns, Sub prime, yen carry trade, rupee appreciation, yen appreciation etc etc and guess what, though we might not know what all these words mean but still it’s a concern to us so lets not take risk, forget the growth story for some time and lets sell off.

Isn’t it what happened in our markets? Who lost?? The average investor err...average trader lost. If he was an investor he wouldn’t have sold off. My logic of telling all this as I always say is whatever the market stat lets not panic, lets stay focussed and invested.

We should understand that markets will be volatile in the short to medium term as there might be more hedge funds which might entangle itself with the subprime issue, or the credit concerns abroad or the temp govt instability but let us stay invested rather lets invest more.

Keep reading.

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