The recent beating that the Sensex has taken in the last couple of days has sent a shrill down the spine of many small time investors. For ordinary folks, market is depicted by Sensex, in such scheme of things an ordinary investor is plunged deep in to a dilemma whether to continue with his SIP investments or severe it till the market recovers.
If one goes by the recent cues of the international market, the outlook does not seem to be too bright. The downgrade of the US economy, the Euro’s economic woes and the stagnancy of Japan does not give much hope to investors around the world. Precisely due to this many FII investments would be pulled back to their respective countries either for job creation or forced by the law of the land.
So what does all this mean to an ordinary investor who has invested in a SIP? A person who has opted for a compulsory SIP would have less than a choice then to keep investing, but what about those investors who invest at will. Should they withhold their investment just because the markets shed a few hundred points in quick succession and that too because of an event in a foreign country? The answer is a flat no. An economy may see a couple of quarters in the negative but if the investments are sucked out of the economy the chances of other quarters being pulled southwards increases exponentially.
So, for people who are panicking by this sudden downfall of the Sensex, should try to reduce their hysteria and keep holding their ground. As a correction in the market is bound to happen and the lessons learned in 2008 should not be forgotten.
If one goes by the recent cues of the international market, the outlook does not seem to be too bright. The downgrade of the US economy, the Euro’s economic woes and the stagnancy of Japan does not give much hope to investors around the world. Precisely due to this many FII investments would be pulled back to their respective countries either for job creation or forced by the law of the land.
So what does all this mean to an ordinary investor who has invested in a SIP? A person who has opted for a compulsory SIP would have less than a choice then to keep investing, but what about those investors who invest at will. Should they withhold their investment just because the markets shed a few hundred points in quick succession and that too because of an event in a foreign country? The answer is a flat no. An economy may see a couple of quarters in the negative but if the investments are sucked out of the economy the chances of other quarters being pulled southwards increases exponentially.
So, for people who are panicking by this sudden downfall of the Sensex, should try to reduce their hysteria and keep holding their ground. As a correction in the market is bound to happen and the lessons learned in 2008 should not be forgotten.
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