The current market scenario is making investors think really hard over what to opt for and what to avoid. Even though inflation along with crude oil prices have also taken a hit, the situation is not positive by any means, with the sensex now looking towards returning to four figures. Yesterady, the sensex crashed yet again as even more top-line stocks fell to their 52 weeks low and closed at the same levels without any sign of recovery. Investors still have to line up and wait for their turn till the market becomes stable. But the question arises, what are the investors supposed to do in this situation?
It's high time when an investor has to take a look at his portfolio and get them reshuffled so as to give more preferences to companies enjoying leadership position in several segments of the industry. Investors need to take into account that their portfolios need to be switched to large cap in case there is higher exposure to mid cap and small cap. This is because large caps, which are the asset class and are hence slated to move up first when the markets revive, are clearly the best bet, and more so in a down market which makes them all the more affordable. Moreover, it is better to enter equity particularly through diversified equity funds in case the exposure to equities is low.
The next precaution is to never put one's eggs in the same basket; it is always better to invest in diversified stocks. This call of action safeguards the interest of the market players due to the presence of vulnerability of any particular stock becoming a prey to the whims and perpetually changing market scenario.
All in all, investors are advised to keep themselves invested and use the current downturn to add more stocks to their inventory in a systematic and disciplined way. Not only this, they should also look forward to following a proper asset allocation methodology to curtail risk to a certain limit, in case they are interested in relatively short term gains.
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