- Wealth PMS (50L+)
A few comments have been mailed in asking “What to do now?”. I wish there was a universal answer but there is not. Here is what I am doing, and my needs are very different from those of others.
I am buying Gilt Funds. This is for my liquid portfolio. Things at play here:
For equity, I am nearly out of everything (except for a few small mutual funds I have put money in and either can’t withdraw as they have lock-ins – tax funds – or don’t have the time to withdraw) But on a trading basis, I have started buying and am long the Nifty. I have a strategy on this and it’s too far fetched to talk about on the blog – but I’m playing for a 20% bounce from current levels. Essentially a target of 4000 or so.
I might consider buying a few stocks at certain levels – but only if they show their strength in their price. And of course, my pessimism about this credit crisis goes away (or there is momentum).
Now to questions: What to do if one has bought the Nifty? The answer demanded is a prediction – will it go up? or down? But that’s not the point. If you bought the Nifty, you bought it for a reason. You should have had a stop loss. If the stop loss is breached, sell. If it’s not, and your original funda – you had a funda the market would go up no? – still applies, then hold. If you don’t have a stop loss – set one NOW. If you have already lost too much, it’s too late to do anything; might as well book losses and figure out what else to do.
Same funda applies for stocks. Fundamentals are what they are – funny-mentals – and you can choose to rely on them; and if your faith still remains, stick on. If you don’t have faith in the companies, don’t hold their stocks. There will always be another day.