What to do when Stock Market is Falling?

What to do when Stock Market is Falling?

Stock Markets never remain static. Volatility is the essence of Markets. But there is a difference between volatility and Rise and Fall.

VOLATILITY: Is the consequence of a change in sentiments influenced by short duration factors. These factors may be International, National, Political, Monetary, Economic, etc. Demand and Supply in stocks, excessive speculative activities in stock markets also are major reasons for volatility. In volatile market stocks or indices move in a range but with an unusual magnitude.
Swings occur either side and Frequently and sharply. Volatility is the darling of Stock Market Traders.

RISING MARKETS: Is a state of the market when the majority of Shares and Indices, as well, keep and continue the upward trend in prices. In such a market fundamental of stocks loose the relevance, only technicals work. Optimism rather extreme optimism prevails which leads to a euphoric atmosphere. In such a situation, investors should refrain from investing. Broadly narrated bull market.

FALLING MARKET: Is a state of the market exactly contrary to the bull market. The falling market can be categorized as a bear market. Prices of stocks continue to fall. In bearish market also fundamentals are ignored. Price to earning multiples contract dividend yields expands. Profitability and valuation ratios become lucrative. Pessimism persists and investor shy away from investing due to pessimism.

WHAT TO DO IN A FALLING STOCK MARKET?

First and foremost one should win oneself psychologically over pessimism.
Remember, In a bull market, People repent for not investing when the shares were available at throwaway prices. This kind of opportunities never emerges often so one should buy shares of good companies with sound financial fundamentals with the time horizon of at least three to five years. Markets will definitely take a turn from bearish to better considering that stock markets never remain static.

 

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IFMC Institute
IFMC Institute is governed by representatives who act as an IFMCians. We strive to build a culture of continuous learning and industry interactions. IFMC enables stock market professionals to expand their knowledge, stay tuned with emerging knowledge, and upgrade skills to climb a career in stock market. We are committed to producing Stock Market Analyst, Technical Analyst, NSE BSE NCFM NISM certification, Equity Analyst, Research Analyst and other financial market professionals for this upcoming sector. Our team comprises of industry reputed practitioners who bring with them years of experience. They are subject matter experts in imparting stock market training. As well as facilitate lively discussion allowing to share their insight and experience in share market classes. No stock market analyst can challenge IFMCians all over the world. They address complex real-life queries, leading to the creation of innovation. Conversely, preparing students to be thoughtful and effective leaders. Our faculty are not only renowned in the share market trading but also passing their skills through stock market courses.

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