This famous quote from Buffett is relevant today.
Investors are afraid of a bear market. Their personal portfolios are already in a bear market. They're anxious about the market falling more and potentially wiping out their investments.
The big question on the minds of investors is what they should do in this situation.
That would be painful but it would also bring some relief. However, selling also brings with it the risk of missing out on a V-shaped recovery like we saw back in April 2020.
There's the option of partially selling your holdings but that wouldn't solve your dilemma, only reduce it. In this case, you would also need to make another decision on how much to sell.
This is more painful than selling because you could potentially see more losses. A portfolio that's down 30% could be down 50% or more if you hold on to falling stocks.
There are many investors who have some money on the side they can invest. They can also choose to sell some stocks to invest in others with that money.
There are others who have missed the rally and are very interested in getting in now. Should you buy now, you're essentially taking a call on the market as a whole. In other words, you would be hoping for a quick recovery.
If that doesn't happen, you will regret your decision of pulling the trigger to soon. You will also have to wait for some time before your portfolio breaks even.
As you've probably realised, there are no easy answers.
And that's correct. There are no easy investing choices in the Indian stock market today.
The uncertainties - interest rates, inflation, slowdown in growth, changing geopolitics - are just too high. No one can predict what the market will do next.
However, one thing is clear. The bears have the upper hand in the short term. They seem to be in control these days. Almost every trading day ends in a decline.
As of this writing, the Nifty is below its recent low made in March 2022. Many largecaps are down more than 15%. The broader market of midcaps and smallcaps have fared worse. Some of these stocks are already down 50% from their all-time highs.
But that doesn't mean you can't make money in Indian stocks. You can.
You just need to look in the right places.
This is what we suggest...
These points should help you overcome some of your doubts on how to invest in the market today.
Happy investing!
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