Sumit is scared, a 6 -month decline in the stock market has changed Sumit’s thinking. Actually, 6 months ago, Sumit was only searching for multibagger stocks, because everything was going on right in the market at that time, during this time, whatever shares he bought, he earned a little bit. Then Sumit bets on some such shares, which were not fundamentally strong. Now Sumit says that such shares have destroyed the portfolio.
Actually, in this decline, fundamentally strong stocks have broken up to about 40 percent. But some weak shares, whose prices have fallen below half. In such a situation, there are millions of people in a country like Sumit, who had been trying their hands in the stock market for the last few years, whose two-three years of earnings flew in a few months.
Weak sharing is upset
Although there has been a slight recovery in the stock market this week, the index recorded a rise of about 2 percent. Smallcap and midcap stocks are especially indications of lower level improvement, during this period, fundamentally strong stocks have increased by 10 percent. But there are some shares which are still completely cold. Now the problem of Sumit is that some shares in his portfolio are still falling, while a little shopping has returned in the market.
Let me tell you, Sumit is new in the stock market, but he knows that strong stocks also fall in the market fall. But when the situation improves, the first shares run away, which are fundamentally strong. Sumit’s portfolio has several fundamentally strong stocks, which are now in recovery mode. But Sumit is nervous to see the shares that have fallen by 50 to 60 percent, and now that the market is in the mood for recovery, he is still cold, Sumit’s question is whether such shares will never cross their allotime now? Sumit says that he has been ruined financially by buying such shares.
This is the problem of crores of investors
Let me tell you, not only Sumit, millions of investors of the country are struggling with such a problem. Especially people who are connected in the market after Kovid. Due to the fall of the last 6 months, the earnings have been eclipsed, the capital has also decreased. That is, along with profit, some principal has also become clear. Actually, there are millions of investors, whose portfolio has some shares, which are not fundamentally strong, whose expressions increased in the market rally, but now they are scaring investors.
Now investors like Sumit want to know what to do with those who are not fundamentally strong? Because there is heavy loss in it, and they are still not running, then why should the portfolio keep it, and how long? If you sell such shares in the midst of this decline, then there will be heavy losses, and do not sell, then when these shares will increase further, it is not known.
If your portfolio also has such midcap and smallcap shares, which have broken more than 50 percent, and are not fundamentally strong, taken at the behest of someone, and now it is not being seen in the portfolio. Especially new retail investors are stuck in such stocks. According to experts, there is still pressure in the market, and may last for the next few months.
Get out like this from weak stocks
According to experts, if you are trapped with weak stocks like Sumit, then it is bad for portfolio. But selling in haste can cause more losses. So first make a list of how strong and weaker stocks in your portfolio, then look at the weak stocks on the basis of loss, which is giving more damage and there is a little less damage.
One thing is certain that the market is not always down, even if it will take more time, but it is decided to go up. In such a situation, wait for a few months and as the market improves, get out of weak stocks, avoid buying new shares with that money, add the strong shares in the portfolio. Try these portfolio diversify, that is, it has bluechip companies, midcap and smallcap.
A new investor should invest in the most loudcap. For example, 50 to 60 percent of the investment can be kept in the lordCap, about 30 percent in midcap and the remaining 20 percent in smallcap shares. You can take the help of experts in the selection of midcap and small cap shares, so that they do not lose their hard earned money by getting stuck in a weak share.
Significantly, the stock market has made investors a lot of cry for the last 6 months. There was no one who said that he did not harm. Especially in the month of February, there was chaos. The march also started with a sharp decline, but a little recovery has come. The Nifty is still about 15 per cent below alltime high. Smallcap and midcap index have dropped more than 20 percent. (Sumit is a fictional name)
(Note: Be sure to help financial advisor before investing in stock market)