What to do in falling market?
Generally, there is an end of every Bull market run where market shows us some minor correction with the continuation of bull run or there is an end of a bull run also where market fall from the highs and we see correction of more than 20% in index and securities.
There is a fear amongst the people that what to do now as they have seen upside rally for long-time and suddenly market is falling.
Here are the things that investors can do in falling market:
Focus on Long-term
Investors should not panic as long as they own very good fundamental companies for the long -term purpose. In short, investors should add some good quality stocks in falling market which is available at reasonable valuation. It is simply buying the dips when market stabilised at lower level.
One should rebalance their portfolio by selling bad quality stocks which are trading at a higher valuation and adding some good fundamental stocks.
Investors can diversify their portfolios in different sectors to avoid the risk and maximize the return. Some sectors like FMCG, banks, and Pharma are defensive sectors to invest in times of bear or falling market.
Review your investment goals.
People should re-evaluate their portfolio stocks to see why they bought them for what period of time, and if the reason for their investment has changed in terms of fundamental or technical factors, they should sell them.
Be an Opportunist
Investors should keep their mind calm and should focus on finding new opportunities to invest in the falling market with a long-term perspective rather than selling all the stocks in the falling market.