Reasons to Avoid Indian Market Now,
India’s equity market was sold off heavily in last few days.
Many investors attribute this to fed tapering. In my view, the tapering is only
the catalyst for this decline.
The root causes of this sell off are:
- Widening current account deficit.
- Increase in foreign debt.
- Increase in oil price.
- Depreciation of rupee value.
We’re unlikely to see the decline in CAD and
rupee appreciation in coming days which has reached historical heights , as
export continue to decline with increase in commodity prices.
There is an adage for this situation " If you can't stand the heat, it's advisable to leave the kitchen"
The other-way, a good investor or trader "will leave a thermometer before leaving the kitchen, so that he can re-enter once the temperature cools down and favorable to him"
Bottom Fishing: The method is just an bargain shop, during crisis many stocks will gradually and sometimes sharply loses it's substantial value.in the market. Generally this is due to the behavioral reflection of our national economy, markets like India will always bounce back. As a Investors we need to do little research to identify which stock is fundamentally strong, watching them drop and then buying them to wait to rise back again.
My advice is that, please don't try to act as an hero in this situation to save the market from falling and burn your ass, it is advisable to wait and buy stock once it is completely bottomed out and If you see some value buying in action.
Happy Investing !.
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