Is that a good thing to invest in stocks when the entire market is performing low?
Sign Up to our stock-market-based Q&A Platform to ask questions, answer people’s questions, and connect with other people.
Login to IndianStox.com (Q&A Engine) to ask questions, answer people's questions & connect with other people.
Lost your password? Please enter your email address. You will receive a link and will create a new password via email.
Is that a good thing to invest in stocks when the entire market is performing low?
There are two reasons behind the price fall,
Let’s consider the first scenario. If there is any negative news regarding the company/ sector that you have invested in, then you have to check whether the news impacts the company revenue in long term or it is just a short-term panic.
If it is a short-term disturbance, there is nothing to worry about the stock price, it will anyway recover in a few weeks/ months.
Now coming to the second scenario, let’s consider the recent pandemic situation. The entire stock market has fallen more than 40%. Most of the retail investors have sold their portfolios due to the panic situation. This panic selling has taken the market even more down than the actual effect.
Almost all of the Institutional Investors have invested a huge amount after the drastic drop. Eventually, they have earned a lot in just 2 to 3 months. The invested amount just got doubled in no time.
This is purely a psychological game, don’t be panic all the time. Just understand the market. Make a long-term view, everything will be alright. It’s just a matter of time.
So, it is good to invest in stocks for long term when there is a generalized issue in the country/ world.