Stay Invested Don’t Panic

Stay Invested Don’t Panic

There is panic in market . Heavy selling leading to sensex , nifty and major indices tumbling down . One should evaluate this with a little bit of common sense .

·         Is this due to permanent or temporary reason . Its because of temporary reason – Corono virus .

·          How long the world can see the impact ( health wise ) of corono virus – difficult to say but definitely not beyond few months . No virus has stayed for very long time .

·          Why this impact in terms of business and market – Business Travels , business meetings , business conferences almost at a standstill pace . Impact on Order Book of any company . There is a gap when order booked and business realised and accounted in profit . So going forward there will be a big dip in revenue ( 1 quarter for sure , may be next 2 quarter there could be cautious wait and watch approach ) . Now with reduced future earning clearly visible and that on the back of already slowing economy short term problems have compounding negative effect psychologically .

What will happen once after few months Corono virus does not exist  --- Reverse of above . Business travel meet , order books everything will grow . The moment increased sales realisation happens market will revise the earnings upward and beaten valuation will again scale up .

Only one suggestion I can give – Don’t redeem your equity investment in panic . Have patience and stay invested . Valuations will move up because it went down because of temporary reason and once that temporary reason is gone it will move up.