Find out how to Deal with Inventory Market Volatility in 2022

Posted On Mar 14, 2022 By admin With Comments Off

Are you worried about the stock market volatility and indecisive how to handle it?

Let me share how a long term investor can use the current market volatility to his advantage, further, how I am dealing with it right now.

So without much ado, let’s begin.

Why is Stock Market So Volatile?

Do you wonder why stock exchange are so volatile?

Handle Stock Market Volatility!

One country decides to attack its neighbour, and the Indian stock market is down by 5 %. The next day, still the attack is on, but we are up by 3 %.

Can anyone explain what is going on?

Similarly, Corona Virus concluded the Indian stock market correct by 40%. Nifty from high levels of 12 k came down to 7.5 k on questions of 4 to 5 weeks.

Nothing changed to the virus, yet the Indian stock market was back from where it started falling.

We may know the answer is liquidity, but the question is, why stock markets are so volatile?

The question is, WHY?

The way I see it is, stock markets are future-looking. So they seek to discount the future.

So anything unknown in the market constructs it jittery.

What is the effect of the virus- sell dies How will the fighting repercussion the world countries- market fails

How to Handle Market Volatility in 2022?

Nifty has been in a range of 2000 extents for the past seven months. Below we consider the chart of Nifty 50 for the past six months.

Nifty 6 Months Daily Chart - Handle Stock Market Volatility

There is no direction.

Further, there is a gap down one day and up the other. So it is killing speculators on both sides.

The good report is investors have the upper hand. There are three ways to handle this volatility.

Do Nothing- Don’t look at your assets. They should be of high-quality stocks for anyone to do nothing. Buy the Dips- Add more for every 5% amendment in any of your stocks. Sell on rising- For days when the market is higher, sell furnishes you don’t want to own for the next decade and heighten the currency positions.

I am do all three.

For capitals like Divi’s Labs and Pidilite, I am doing nothing.

For furnishes like Clean Science Fine Organics, I am buying the dips.

I am offloading to raise cash positions for broths like TTK Prestige that I don’t want to own for 10+ years.

Some Questions Seeing Volatility of 2022?

Some blog books have asked me questions related to the volatility of 2022. So let me provide answers here.

Should I Sell my Stocks When Markets Are Volatile?

It depends on your view of the market, and can you remain invested for the time frame where you think the market will remain volatile.

So if you think the market will remain volatile for the next year or so but you can’t remain invested for the next couple of years, you should book out of the positions.

However, if you can remain invested for 1+ times more than you think the market will remain choppy, you shouldn’t consider selling the stocks. So yes, you can look to book out of low-quality stock and invest in better stocks.

Should I Buy Furnishes when Premiums Fall?

Yes, if “youve had” the currency, you should consider buying either high-quality capitals or starting a SIP in some of the best mutual funds for 2022.

The volatility is not here to stay, and at some spot, it has to fade away as well. So if you are able to ignore the volatility, you should consider buying great business is accessible to a discount.

Remember, after your purchase, the stock price can come. So you should be prepared for the same.

How Can I Limit Losses to my Portfolio in a Volatile Market?

The best course to limit the losses in a portfolio is to invest simply in enormous fellowships. But, unfortunately, good is not enough and only the great companies.

The question is how one can identify huge companies.

I do it with fundamental analysis, business checklist and investment checklist. Then I use technical analysis to try to invest at a better price.

Final Thoughts

The market has always been volatile and will always remain volatile. Therefore, the investor must manage the stock market volatility and make it an advantage.

Many records and articles online say that you don’t have to pay attention to the volatility. The question is when you have your hard-earned money gave, you can’t ignore it. It’s practically not possible.

Not watching your portfolio take a 50% thumped when you have to likewise remain at home doing nothing isn’t essentially possible.

One can keep calm if one invests in top caliber firms because I can say for sure that merely being a long-term investor is not enough.