Market Crash – What to Do?

“Sensex cracks 714 pts, Nifty below 10,500: Exit poll, growth worries weigh” The Economic Times. 

A stock market crash is an abrupt theatrical decline of stock prices across a momentous cross-section of a stock market, resulting in a substantial loss of paper wealth. Crashes are driven by panic as much as by underlying economic factors. They often follow speculative stock market bubbles. Stock market crashes and pullbacks can seem terrifying or scary. But you are actually worse off in your Individual Retirement Account by not investing in stocks than you are if there is a pullback or crash. Because wealth is all about investing and to do that, you have to take risk and invest. Since yesterday, the market is getting down because of expecting political changes in the country. 

In fact, the market has not crashed but with the increased volatility and the current bear market, it is on everyone’s mind. So it is advisable to not freak out as market crashes are normal and market doesn’t go up in a straight line. It is further advisable to diversify your money in different investment avenues along with stock market and to invest in the companies that are undervalued, profitable and have good Balance Sheets as these type of companies are likely to survive a recession.

#Dr. Esha Jain, School of Management, The NorthCap University Gurugram.