Stock market crash lessons to learn, An analysis of the reasons for the decline in the Indian stock market and the challenges ahead.
What lessons can investors learn from the crash?
Although the trend of the stock market has been volatile, the Indian stock market has recently experienced a decline that has not been seen in the last five months. At the close of trading last week, the Sensex on the Mumbai Stock Exchange fell by 1,476 points.
The Nifty on the National Stock Exchange fell for the eighth consecutive day, losing 420 points. Both indices fell by 6 percent in February. After reaching a peak in September, the indices have also fallen by more than 10 percent.
Investors have lost more than 9 lakh crore rupees in the decline that occurred last Friday.
US action
Although there are various reasons for the decline in the stock market, the economic policy decisions followed after Donald Trump took office as US President are considered to be the main reason. Trump, who has already announced various restrictions, has recently imposed import tariffs on neighboring countries and imposed a 10 percent additional import tariff on China.
The resulting concerns and fears about the trade war have had a major impact on the market. Trump’s stubborn policy decisions are believed to have created an uncertain environment in the international economic environment.
Apart from international factors, domestic factors are also having an impact. It is believed that there is hesitation among investors due to the economic environment.
Furthermore, experts believe that investors are afraid that the decline will continue due to the continuous negative news.
The trend of the Indian rupee is also a reason. It is also believed that international factors have affected investors psychologically.
Next step
Amidst this trend in the stock market, questions about the strategy that investors should follow are also important. Questions have also arisen about how the market trend will continue.
Meanwhile, the meeting between US President Trump and Ukrainian President Zelensky ended in conflict. The repercussions of this are also believed to have an impact. They say there are no definitive answers to the question of whether the market has bottomed out.
Similarly, predictions regarding the factors that could lead to a market recovery are also problematic.
In this context, investors, especially retail investors, say it is important to remain calm and not panic. They say there is no point in doing much in the midst of the market’s erratic trend. They say that nervous decisions like selling shares and exiting or stopping SIP investments should be avoided.
In this context, choosing good stocks and investing is also appropriate. Experts recommend that approaching stock investment with a long-term perspective is always the best strategy.
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“I appreciate the detailed explanation, very helpful!”