Social media platforms are rife with investor anxiety as the Indian stock market closed the week, after extending their losing streak for the fourth consecutive session on Friday.
Among the broader markets, Nifty Midcap 100 and Nifty Smallcap 100 indices settled lower by 2.21% and 2.94% on Friday. Persistent selling dragged the Nifty to an intraday low of 22,372, before closing at 22,600. Sensex also settled lower amid sustained foreign fund outflows and rising crude oil prices weighing on investor sentiment.
The development has triggered a popular discourse on Reddit, where many shared their recent experiences with market volatility.
“Literally my portfolio went from almost breakeven to -11% in 3-4days,” a user commented on a Reddit discussion titled: “Don't check your portfolio today. I repeat. DON'T CHECK YOUR PORTFOLIO.”
Don't check your portfolio today. I repeat. DON'T CHECK YOUR PORTFOLIO.
by u/TackleSame4003 in IndianStockMarket
Many users echoed similar sentiments about facing disappointment with their Indian equities investments this year. At the same time, many also spoke about buying the dips, which is a reference to buy shares at lower prices during market corrections or temporary downturns.
“What are you even talking about, it's the time to buy the dip!!!....,” another user commented. Reacting to this, some expressed pessimism about short term market movement, noting that there is “another dip” coming.
Such concerns are not unwarranted. While buying the dip is a popular investment strategy, one must consider certain risks before deploying more money during a market downturn.
- Risk of further declines: When there is broader market uncertainty, stock prices may experience further downturn even after significant correction. You should deploy more money only if you have liquidity to meet your other expenses and are comfortable with the risk.
- Uncertain recovery: There is no guarantee that a stock or the broader market will recover quickly or return to previous highs. This becomes a risky bet for your portfolio, particularly if your debt allocation is very low.
- Weak fundamentals: A falling stock price may also reflect poor business performance. You should not simply invest more money into a stock or mutual fund because it's cheaper. For stocks, you can check company fundamentals and expert view and for mutual funds, a 3 or 5 years comparison with its peers may help.
- Emotional decision-making: Fear of missing out on lower prices may lead you to make impulsive decisions without proper research or a clear investment plan. That is why it is recommended to make investments based on your goals and not for chasing quick returns.
ALSO READ: Bond Market's Big Short Bet Gets Wakeup Call As AI Trade Wobbles
Stock market investments are one of the most riskiest vehicles to make money. Without sufficient liquidity, emergency funds and ability to manage stress, impulsive decisions can lead to long-term financial stress. That is why it is recommended to discuss with experts before making any significant financial commitments.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.