Examinations tests the talents of the students and corrections are the equivalent of exams for investors. They are part of a healthy stock market and part of life.
Any mature investor would welcome the correction as it gives opportunity to buy several good stocks at attractive pricing.Corrections tend to occur following a sharp run-up in stock values, but can occur any time, with little or no warning.
Corrections often happen so quickly that by the time investors start thinking about selling the stocks in profits they wipe out the profits. In the mid of the correction investor realise the meaning of the adage "Stocks take stairs to move up, but an elevator move down".
Stock market corrections announce a discount sale!
During festivals we generally get discount sale and the people use it happily to buy the desired things at discounted rates. But investors are seldom happy about the discount sale and generally avoid buying stocks when the market corrects significantly.
As a prudent investor we should welcome the corrections as they are filled with great opportunities. Remember during the last correction L&T was available at Rs 500+ and the stock went up like a rocket to touch Rs 1600+. Who can forget the prices of OFSS @Rs 500, financial tech @ Rs 400, GSPL @ Rs 30 which all went up by 3-4 folds.
During the correction, the investor should look around for great, solid, blue chip companies that have weathered depressions countless times before. The odds are substantial they will be selling at discount prices, and when the market finally does recover (which it inevitably will), your portfolio will profit from the shrewd, logical investment decisions you made while the retail investors were in a panic. The secret to wealth has always been to "buy when there's blood running in the street and sell when there is euphoria". You must have enough faith in yourself to buy when the rest of the market is selling. Most people don't have the self-confidence and resolve to do so and always end up following the crowd.
Remember, just because you follow the majority of people, does not mean the majority of people are right. That is why 95% of investors are still losing money in the market. If we need to win the market we should base our buying decisions on analysis and value and we will, more often than not, come out ahead. Remember it is buying which is the most important decision. Warren Buffet says "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price". It is clear that buying is more important than selling and the buying decision becomes easier when the market corrects.
So let us welcome correction and we would pray for a market crash!
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Above article is not mine. Got it today somewhere in the internet and thought it would be beneficial for the readers at TJ
Any mature investor would welcome the correction as it gives opportunity to buy several good stocks at attractive pricing.Corrections tend to occur following a sharp run-up in stock values, but can occur any time, with little or no warning.
Corrections often happen so quickly that by the time investors start thinking about selling the stocks in profits they wipe out the profits. In the mid of the correction investor realise the meaning of the adage "Stocks take stairs to move up, but an elevator move down".
Stock market corrections announce a discount sale!
During festivals we generally get discount sale and the people use it happily to buy the desired things at discounted rates. But investors are seldom happy about the discount sale and generally avoid buying stocks when the market corrects significantly.
As a prudent investor we should welcome the corrections as they are filled with great opportunities. Remember during the last correction L&T was available at Rs 500+ and the stock went up like a rocket to touch Rs 1600+. Who can forget the prices of OFSS @Rs 500, financial tech @ Rs 400, GSPL @ Rs 30 which all went up by 3-4 folds.
During the correction, the investor should look around for great, solid, blue chip companies that have weathered depressions countless times before. The odds are substantial they will be selling at discount prices, and when the market finally does recover (which it inevitably will), your portfolio will profit from the shrewd, logical investment decisions you made while the retail investors were in a panic. The secret to wealth has always been to "buy when there's blood running in the street and sell when there is euphoria". You must have enough faith in yourself to buy when the rest of the market is selling. Most people don't have the self-confidence and resolve to do so and always end up following the crowd.
Remember, just because you follow the majority of people, does not mean the majority of people are right. That is why 95% of investors are still losing money in the market. If we need to win the market we should base our buying decisions on analysis and value and we will, more often than not, come out ahead. Remember it is buying which is the most important decision. Warren Buffet says "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price". It is clear that buying is more important than selling and the buying decision becomes easier when the market corrects.
So let us welcome correction and we would pray for a market crash!
----------------------------
Above article is not mine. Got it today somewhere in the internet and thought it would be beneficial for the readers at TJ
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