Sudhir Patel, 26, working with an MNC and an ardent equity investor walked into my office, harried this time, pretty obvious that he was considerably disturbed with the current downturn. He went on to tell me that, he had built a portfolio of about Rs. 4.5 lakh into equity, which was now standing at Rs 2 lakh.
The investments were done about 12 months back, and he complained that subsequently too, every stock he bought, slumped much lower the very next day. Now, he wanted to know, 'what should he do now?'
They say the simple rule in equities is, "Buy low, Sell high!"; the complexity kicks in only when you try to figure out the low and high of the market.
The news flows confuse the retail investors endlessly: even when the markets were at 21,000, there were news flows that it would hit 25,000 to 30,000 within few months. This urged the investor to take the bold step and enter equities at that stage, and for those who did this, the scene is not looking very pretty alas!
The markets are trading at multi-year lows today, and many of us who did not sell during the fag end of 2007, have a sad story to tell. We take you through some do's and don'ts of surviving the current stock market meltdown.
Text: Anil Rego. A CFA-PGDBA, Anil is the founder & CEO of Right Horizons, an end-to-end investment advisory and wealth management firm.
Photographs & illustrations: Rediff Archives
Also see: Investment trends in 2009
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