Friends, today is March 14, 2025 and at the time this article is being written, we are seeing that the stock of Nifty 50 has fallen at least 4000 points from its all-time high.
And we see that the portfolio of retail investors who have invested in the stock market has also gone down by about 30 to 40%
Since the time of Corona, many new investors have come to the country who always saw a boom in the market, they never got a chance to see the market fall, such investors have now seen a decline in the market and they are incurring huge losses
In today’s article, some tips are being shared for those investors which we have learned after our long experience.
We need to avoid many mistakes which we often make.
The market will go up or down, this is the truth of life. Hello investors! First of all we have to discuss what mistakes we make when the market falls?
Mistake number one!
If we have 10 stocks in our portfolio, we tend to invest more in the companies whose share prices have fallen the most. This is the worst way to allocate our capital.
Mistake number two!
We buy too many penny stocks or too many cheap stocks in such times without doing any research
Mistake number three!
Suppose we have 10 stocks in our portfolio and out of them 8 stocks are giving us good returns and two stocks are giving us bad returns. We invest 50 to 60% of our money in just these two stocks so that their average purchase decreases but when the time comes the whole portfolio goes into loss. So we are good stock picker but bad fund allocator.
But there is no need to panic in a falling market, rather it is time to take a decision after thinking carefully. Today we will talk about which stocks should be bought in a falling market and which stocks should be left out. Look friend, there is always risk in the market,
But with the right strategy we can minimize the risk and increase the reward.
Stocks with strong fundamentals
Friends, the first rule in a falling market is – focus on companies with strong fundamentals. Companies whose business model is strong, whose revenue growth is good, which have less debt, and whose management is transparent.
These companies perform well despite fluctuations in the market because their business model is so strong that they keep making profits even in difficult times. So if you want to invest for the long term, then research on stocks whose fundamentals are strong.
These stocks may not give you much return in the short term, but they can make you rich in the long term.
Stocks suitable for long term
Friends, the best way to make money in the stock market is long term investment. If you invest for ten-fifteen years, you get the benefit of compounding. And compounding is also called the eighth wonder. But remember friends, long term investment does not mean that you buy the stocks and forget them.
You should keep reviewing your portfolio from time to time and make changes whenever necessary.
dividend paying stocks
Friends, do you know that you can earn money from the stock market without selling shares? Yes, through dividends. Many companies give a part of their profit to their shareholders as dividends. Investing in dividend stocks can be a good option in a falling market.
Because you keep getting regular income, whether the market goes up or down. But keep in mind, do not invest only by looking at the dividend yield. Also pay attention to the fundamentals and future growth of the company.
sectorial leaders
We should invest in such companies which are leaders in their sectors and whose future is bright, but we have to keep in mind that the valuation of these companies is not expensive
Because these companies have big market share, brand value and strong fundamentals but before checking all this, one should check the valuation of the company to see if the valuation of the company is expensive or not
We should exit from these companies or not buy their stocks
We should get out of such companies whose fundamentals are very weak. While inspecting our portfolio, we see that we are incurring the maximum loss in those companies. We buy more stocks of those companies so that our loss is recovered and we can average it.
We should get out of such companies whose fundamentals are very weak. While inspecting our portfolio, we see that we are incurring the maximum loss in those companies. We buy more stocks of those companies so that our loss is recovered and we can average it.
Sometimes the valuations of companies with strong fundamentals are very expensive. In such a situation, we should not invest in these companies immediately. We should wait for the valuations of these companies to become cheaper.
If after investing in a company our investment target is met then we should exit that company
Conclusion
We hope you all liked this information. To check the fundamentals of the company, you should take the help of websites like Money Control or scteener.in