The markets came to a grinding halt as Nifty hit lower circuits of 10% at 8555. The spread of Covid19 virus led panic selling across the global bourses. No levels were respected by the market & Algorithm driven systems kept selling at whatever price possible without any mercy.
The market opened again & splendidly recovered as bargain hunters started buying throughout the day with both hands & within a single day Nifty saw the 8,000, 9,000 & 10,000 series levels.
Looking back, here are the key lessons we can learn from one of the craziest day of stock market:
- Manage your emotions & avoid ‘Panic Selling’.
- Keep some cash in hand to buy on days like these. After this event, I made a practice of going home with at least 5-10% cash in my portfolio.
- Start buying in phased manner when there is carnage on the streets. This works most of the time.
- Avoid binge watching news.
- Avoid timing the market & waiting to buy at exact pin point low levels.
- Double down in high quality businesses that you have high conviction will fly once market recovers.
- Don’t think of quitting the markets when people are screaming “It’s all over”.
- Double your SIPs if you’re having any. This will help you get more Units at reduced NAVs. Once market recovers this will result in explosive returns in your Mutual Fund portfolio.
- Hold quality businesses with patience & tolerance. You’ll definitely thank yourself later once markets recovers.
- Keep broader picture in mind. Believe in long term India as well Global growth story. Throughout the history, we humans have grown exponentially & are highly resilient.
Remember: Market crash are temporary. Growth is permanent!
As a well wisher of your friends, you can also share this with your investing / trading friends & groups and help them avoid mistakes which may cost them a fortune.
Wishing you a profitable journey ahead!