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What should you do with your investments as stock markets fall? Some tips of financial gurus

By: Nepse Direct Mar 23, 2020

Investing in share market can be a daunting task. An investor faces several question before making an investment decision. There are more invstors who have lost their wealth in the stock market and very few have been successful. 

In context of Nepal, many investors have lost their wealth in stock market in very short period of time. Some investors enter stock market haphazardly by  dreaming to earn handsome amount of money overnight. Several investor are in a mood to exit from stock market.

Patience,courage,determination, humility, focus are the neccesary traits for successful investors. John Templeton suggest that " Sell a stock only when you have found a new stock that is a 50% better bargin than the ine that you hold." 

Here are some tips that the investors should do with their investment when the stock markets fall:

  1. First and most important, stay safe and look out for others. We need each other as neighbours and family. Enjoy the extra time at home.
  2. The best way to avoid panicking is to know your own risk appetite, diversify and take trusted advice if you need to.
  3. Don't sell what you wish you had sold a month ago – if you shut the stable door, your horse can't come back.
  4.  Fear and opportunity move in tandem in financial markets. Volatility is fed by people reacting, not thinking.
  5.  Things that have fallen in price are usually better value – be guided accordingly.
  6. Sometimes, markets are mad. The value of sound businesses varies less than the share price.
  7. Nonetheless, while the downturn will be painful, markets have moved a long way to discount the bad news which is yet to come on the economy and on corporate profits. 
  8. All panics are resolved by time and price. Time allows the problem to be resolved and price represents the market's impatience to get to a level that discounts the bad news.
  9. While the near-term will remain challenging, remain focused on long-term opportunities.
  10. Be one step ahead of crowd. crowd moves the market, following the crowd might be dangerous to successfull investment.

Mega Maya Bachat Khata
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