There is panic in the share market. Prices are going down and you are making loss. What to do now? Buy, Sell or Hold shares? Please suggest. These are some of the questions that most investors ask.
Here are some proven tips to follow when there is great panic and volatility in the market.
Assuming that you have done all study and research in selecting stocks, there is no need to panic when there is great volatility in the share market or even if your stock is making loss. The point to remember here is that a company and its stock in the stock market are two different identities. Stocks can rise or fall with volatility and bad news. But a good company with good fundamentals and strong top management will have little to no impact. Stock market and a company work on different principles. A good company will always try to grow. Do not get panicked with huge downfall in the share market or on bad news.
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| Share Market Panic |
You need to understand the present health of the company that you invested in. Do further research. Try to understand why the prices of the stock are going down. If there is uncertainty and volatility in the market, fear will prevail. This is human nature. Sudden downfall in the stock market is not the end of the world. Good companies have very strong fundamentals but they are sometimes washed away with bad market emotions.
Never sell off your stock in this situation and book loss. Instead, contact the “Investor Relations” Department of the company and ask following questions:
Never sell off your stock in this situation and book loss. Instead, contact the “Investor Relations” Department of the company and ask following questions:
- Why is there sudden downfall in your stock prices? Are there any bad news or rumors?
- What is the company doing about the situation?
- What are company shareholders and employees doing with their shares? Are they buying, selling or holding the stock?
- Is the company buying its own shares?
With all the answers, you will get a clear picture of the situation that will help you what to do – Buy, Sell or Hold the Stock.
Resources & References:
- Price-To-Earnings Ratio (P/E Ratio)
- Fundamental Analysis of a Company
- Using Value, Growth, Income & GARP for Stock Analysis
- Quality of Stocks Vs Quantity of Stocks
- How Many Stocks to Buy - Portfolio Management
- Investor Consideration on Market Decline
- Market Correction - Buy, Sell or Ignore
- Don't Panic in Share Market
- Stock Market Crash of 1929
- Market Panic - Be Brave. Buy Cheap
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