In this week, stock market bulls were seen nursing their wounds as bears carried out a bloodbath on Dalal Street, causing benchmark indices to suffer their worst loss in the past 10 months.
The increasing Ukraine crisis further triggered the selling, as Western nations warned of a Russian invasion. As a result, all market sectors finished in red. The 30-share pack Sensex fell 3%, and the NSE Nifty lost 3.06%. TCS was the sole gainer, up 0.93%. JSW Steel was the Nifty pack’s biggest loss, plunging 6.47%.
This dark picture of the market could have worried you. Many of the questions that have been pressed may have invaded your peace - should you buy the dip, should you hold and do nothing, or should you sell stock to stop your loss? Let’s find out.
Mark Twain was wrongly told that the only two certainties in life are death and taxes. For investors and market players, add another certainty: periodic corrections. No bull market lasts forever. We are in a difficult situation and the only thing I can say with certainty is that it will be the first of a long career as an investor. After all, I have this on the authority of Warren Buffet, who likes to say the stock market is manic-depressive.
The bipolar nature of the market, if one may call it that, was on display earlier this week when the market first plummeted, and then the next day, it rocketed. So what do you do in such circumstances? You go back and review your holdings.
In the case of smart values, all our stocks are components of the Nifty 50 Index and are among the top companies in India. There is no fear that these companies will not exist when the markets recover. So there is no need to overreact and overreact to a particular market move.
We make long-term trends in smart values and large-cap liquid stocks. Periodic corrections do not change long-term trends meaningfully. Some of the shares we have held since the inception of basket bags like Bajaj Finance and Infosys have been meaningfully valued and we will continue to hold them. We may make some changes to the portfolio, but it will be based on our long-term goals and not on specific market movements.
The investment target of Smart Values is to generate returns above and above the Nifty 50 Index, and we have maintained that target this year. We hope it continues.