Nifty Correction and Investors Plan to Tackle
Prosenjit Ghosh
SEBI Registered Research Analyst | Price Action Trader | Mentor | Trainer | Algorithmic Trader | Quant | Winner of Zerodha 60 days & Fyers 30 days Challenges.
For Investors it might feel scary, when Nifty is correcting, as their portfolios may go into red and many stops might get hit. ?So, what could be an Investors Plan to tackle the times of corrections?
First thing is one must not panic. At the end of the correction, the price always recover for all the Good Stocks. So, the Goal is to "Hold" the existing Investments, and if necessary a "Buy on Dips" strategy can be implied, if the price goes below the entry price of the stock. This will take the average entry price down, making it easy for the portfolio to recover from the shock, earlier than expected.
Secondly, a Correction can be big or it can be small. It can complete in a short amount of time or it can take a huge amount of time. So, "Patience" would be the key for any Investor during these times of Corrections.
On the other hand, Corrections are the best time, when an investor can get the Good Stocks at the Cheaper Prices. Hence they can take the advantage and might add good stocks at cheap prices in their portfolio's.
And If a stop is hit, then it is better to shred them from your portfolio and add other stocks of interest.
This is an ideal plan for a Long Term Investor. A Correction is an advantage for them to reduce and add stocks to make their portfolio stronger.