What goes up must come down, warned market experts when Sensex was touching record heights a few weeks back.
Therefore, when markets started sliding recently, it should not have come as a surprise. Yet marketmen seem to be dumb-founded by what they term as a 'cataclysmic fall'.
The government along with the finance ministry have pulled up their socks in their bid to explore the reasons.
In an attempt to seek an answer, Indrani Roy Mitra of rediff.com spoke to market analysts, traders and head honchos of business. In the next few days, we will bring you a series of interviews which apart from focusing on the issue will also provide guidelines to investors.
Excerpts of an interview with M P Vora, Senior Corporate Advisor, Digi Port:
For the past few days the markets have been dropping like never before. Do you think this is a 'correction' or is there more to it than that?
There is more to it than 'correction' since the downward trend in the market is a combined impact of certain global and national developments.
Everyone talks about the fundamentals of the Indian economy being strong, then why this historic market meltdown?
This historic market meltdown had nothing to do with the fundamentals of Indian economy. It was caused by factors beyond fundamentals.
It appears as if the Indian stock market is safe only for foreign institutional investors (FIIs) or big domestic funds, while the small investor is being slaughtered. What is your opinion on this?
I agree completely. For, it is only the Flls and domestic funds who are the movers and shakers of the market.
Do you believe that the Indian stock markets are regulated well enough to protect the small investor?
Yes.
Market gurus like Marc Faber and Hemen Kothari say that India is in a 10-year Bull Run phase. Do you agree? Why?
There is no doubt that India is on the enhanced growth path, which in turn will have positive impact on the stock market.
Where should the small investor invest now? Seeing that the stock market is rising to new heights one day and falling like never before the next, should he enter the market at all?
A small investor should have a mixed basket of equity and debt. He should put a portion of it in gold and in mutual fund schemes. He should resist from trading under the prevailing circumstances.
Should small investors just sell off their stocks and run from the market? Or should they depend more on mutual funds for investment?
Small investors should neither sell nor buy. However, if they have liquidity they can invest in the right kind of mutual funds.
What stocks or sectors should retail investors look at now?
Retail investors should now look at infrastructure, textiles and apparels, auto and auto components and engineering.
What according to you are the 5 mistakes to avoid for small investors, especially during such volatile times?
- Panic buying or selling
- Resorting to trading
- Over trading
- Keeping silent
- Neglecting the development
What according to you are the 5 basic norms of smart investing?
- Keep yourself updated on market conditions
- Identify and track the right companies
- Select a good, recognised wealth manager
- Have a judicious mix of sectoral investments with growth potential
- Have a diversified portfolio
Sensex Rise and Fall: Complete Coverage
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