You might be reading the headline : Investors lose Rs 5.61 lakh crore in the last two trading sessions,  Suzuki just lost nearly $2 billion in 2 days because of what’s happening in India, etc.


  • What should you do in such a situation ? 
  • Should you buy or exit as an investor?


Market Crash


Before you take any discussion. It is important to understand,

Why markets are falling: Key factors behind the slide

While rich people were worried about the so-called 'Rich Man Tax'. Budget fine prints were real shockers for many foreign portfolio investors, as the increase in surcharge on income-tax hit them too. This would have an impact on their long term return and projection too. 

Below images show FII and DII Net - Buy/Sell (snapshot from Stock Edge) before and after the budget. 




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If you watch closely, there is no much change in the Buy and Sell trend. But, panic has triggered Greed and Fear in the market. If you check Nifty 1-year returns from (11th Jul '18 to 9th Jul '19) it's almost 5.5% positive and 4.4 % down from the top. So presently, we are hanging around the median and yet not into a market crash like scenario.

Nifty 1 Year return



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Market Fall

What to Do During a Stock Market Drop?

Remember all those market expert Quotes, which you heard, promoted, forwarded or tweeted.

  • The time to buy is when there's blood in the streets
  • The right time to buy in the market is now. 
  • Stocks are now generally better than bonds.
  • You can’t time the market
  • Games are won by players who focus on the playing field – not by those whose eyes are glued to the scoreboard. 
  • and many more.

Put them into action, start investing through the SIP (Systematic Investment Plan) route. It can also be a good time to invest through ELSS to save tax (Check out my post: Top ELSS Mutual Funds for SIP).

Also, check your asset allocation as it will help you trigger your equity purchase during any stock market fall or crash.

The most important key to successful investing can be summed up in just two words - Asset Allocation. ~ Michael LeBoeuf




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