By Irshad Mushtaq
Market downturns often unsettle investors and traders, leading them to perceive a bleak economic future. However, market corrections are a natural phenomenon and are sometimes essential for long-term health. Historically, market declines can last several months, which is considered normal. During market downturns, a staggered investment approach is advisable. Hastily investing in a market that’s plummeting, known as “catching a falling knife,” can be risky. However, these periods offer opportunities to invest in high-quality shares, ETFs, and mutual funds. Although immediate returns are unlikely in a bearish market, and your investment might further decrease in value, it’s important to remember that this presents a chance to accumulate more assets over time. Quality investments prove their worth over extended periods. Several factors such as economic shifts, government policies, international issues, wars, and elections can drastically influence the market. Even a market drop of 20% is possible. However, if your portfolio is diversified, containing high-quality stocks, well-managed funds, and low leverage, you are less likely to face significant issues in the long term. Sound money management and disciplined investing will protect your investments. In times of market uncertainty, it’s tempting to sell and then re-buy. While it’s possible to trade on half of your portfolio, aiming for profits, timing the market is complex and often unsuccessful. Investors should focus on maintaining a diversified, high-quality portfolio and adhere to a disciplined investment approach. In summary, market declines should be viewed as opportunities rather than setbacks. By investing wisely in quality assets and maintaining discipline, long-term investors can weather market fluctuations and potentially achieve substantial returns. Conclusion Market downturns can be unsettling, but they’re a natural part of economic cycles. Instead of rushing to sell, consider a staggered investment approach—this is an opportunity to accumulate quality assets that thrive over time. Diversification and disciplined investing will help protect you through uncertainty. Remember, downturns can be doors to future profits. Stay strong and focused on long-term goals!
- Learn from the insights of @Irshad Mushtaq, Writer, Investor, Entrepreneur & Founder of M I Securities! Connect for valuable financial advice at misecurities@bp.sharekhan.com
The post first appeared on Kashmir Observer
