How to invest in the market today?

“I’ll tell you how to get rich. Close the doors. Be afraid when others are greedy. Be greedy when others are afraid.” – Warren Buffett

This famous quote from Buffett is relevant today.

Investors fear a bear market. Their personal portfolios are already in a bear market. They fear that the market will fall further and may wipe out their investments.

The big question on the minds of investors is what to do in this situation.

Should you sell, take your losses and sit out this volatility?

That would be painful, but it would also bring relief. However, selling also carries the risk of missing out on a V-shaped recovery, as we saw in April 2020.

There is the option of selling part of your property, but that would not solve your dilemma, only reduce it. In this case, you also have to make another decision about how much to sell.

What about holding on?

This is more painful than selling as you could potentially incur more losses. A portfolio that has fallen 30% may fall 50% or more if you hold on to declining stocks.

Should you buy more?

There are many investors who have some money on the side that they can invest. They can also choose to sell some stocks to invest in others with that money.

There are others who missed the rally and are very interested in joining now. If you buy now, you are essentially relying on the market as a whole. In other words, you hope for a speedy recovery.

If not, you will regret your decision to pull the trigger too soon. You will also have to wait some time for your portfolio to balance.

What is the best decision?

As you probably realized, there are no easy answers.

And that’s right. There are no easy investment choices in the Indian stock market today.

The uncertainties – interest rates, inflation, slowing growth, changing geopolitics – are simply too great. No one can predict what the market will do next.

One thing is clear, however. The bears have the upper hand in the short term. They seem to be in control these days. Almost every trading day ends in a decline.

At the time of writing, the Nifty is below the recent low of March 2022. Many large caps are down more than 15%. The broader mid-cap and small-cap market has underperformed. Some of these stocks are already down 50% from their all-time highs.

But that doesn’t mean you can’t make money with Indian stocks. You can.

You just have to look in the right places.

We recommend this…

* If you’ve found great stocks with solid fundamentals and it’s fallen to a reasonable level, then it’s time to put in some money. Take a partial exposure. You can invest more if the market continues to fall.

* If you’re looking for stocks that tick all the right boxes when it comes to long-term investing, here’s a must-read feature article – Looking for consistent composite stocks? Here’s a watchlist for you.

If you want to start from scratch, it’s a good idea to look for the most undervalued stocks in the market. It is a good place to start your search with a fresh mind. Check out Equitymaster’s Stock Screener for the most undervalued stocks.

* If you’re holding stocks with poor or questionable fundamentals… SELL. They are not worth holding on to.

* If you have high quality stocks in your portfolio, you can keep them. Keep a close eye on their fundamentals.

* If you are a trader it may be a good idea to sit out this volatility unless you want to do short selling.

These points should help you clear some of your doubts about how to invest in the market today.

Have fun investing!

Disclaimer: This article is for informational purposes only. It is not a stock recommendation and should not be treated as such.

This article is from Equitymaster.com

(This story was not edited by DailyExpertNews staff and was generated automatically from a syndicated feed.)