5 Ways To Deal With Stock Market Fear – Stock Market for Beginners | Groww

Posted by


Friends, when the market becomes very volatile, then the uncertainties increase a lot Like what is happening in the markets in todays times Sometimes the market goes up a lot and sometimes it goes down But if we talk about the market now, it is very down As compared to the market top which it reached at one point But when there is a lot of volatility in the market, then there is a lot of panic among the investors And at the time of panic, investors make a lot of mistakes Which they should normally avoid making So in this video today we are going to talk about 5 such things Using which, you can save yourself from panicking in this volatile market situation I, Jagdeep Singh, welcome you to the Groww channel Today we are going to talk about 5 such things Using which, in this time of panic in the market You can save yourself from making some mistakes And make a good investment and get good returns in the coming time The first point You should avoid making a lumpsum investment If I talk about lumpsum, then there are lot of people Who, when the market goes down a lot, they have a lot of cash reserves Which means they have money to invest So at this time, a lot of people make the mistake of making a lumpsum investment And invest all the money at one time By thinking that the market hit bottom today Today the market has gone to the lowest level and it cannot go down further So at this time when the market is very volatile People panic a lot At this situation we should beware of making a lumpsum investment Now you must be thinking that if you shouldn’t do lumpsum If I can start an SIP in mutual funds, how can I do that in stocks So if I talk about stocks, and you don’t want to make a lumpsum there If you don’t want to invest all your money in one day So you can invest 10% every time the market goes down Which means that all your investment Should be done in small tickets This can be a very good time to invest because the market is very down You can get very good shares at low prices But the biggest people make in panic here is that The mistake they make during volatility is of lumpsum So what can happen in lumpsum is that when the market is very volatile, sometimes it can be 6-7% up So if you make the entire lumpsum investment at that time You get very high prices But if you make investments of 10% There are a lot of chances that one day you will get some quantity at a higher price Then quantity at a lower price And the next day if the market goes more down, you will get the quantity at an even lower price So here the first learning for you should be You should save yourself from mking lumpsum investments here If you are getting very afraid Then you can make an STP Put all your money in liquid fund And slowly remove your money from there Because of which you will have the benefit that You will get daily returns from liquid funds If you start an STP then A regular amount of money will come out from there Go to a good mutual fund where you want to invest Where you want to get the benefit of the bottom, you can invest there So, avoid lumpsum at this point of time If I have to talk about the second learning then that would be, never to redeem out of panic Redeem, if you have invested money Then why do you invest money there? If today you have invested Rs 100 somewhere It is possible that in one year it can be 110, 115 or 120 But when the market goes down and there is a crash in the market When there is some negative news in the macro level it is possible that there can be a big crash in the market Like what is happening right now It is possible that the investment you made of Rs 100 is now at 90 But if it starts to recover in the coming days it is possible that that 100 can go to 100 or 120 In just sometime But here if you make the mistake of withdrawing or redeeming in panic So at the time of 90, the day you buy it Firstly, you book a loss of Rs 10 And second, the investment you made for one year You miss the opportunity cost for that as well So whenever there is a crash in the stock market and it goes down If you have an emergency where you need money Then you should redeem it But giving into panic and in volatile markets, you should never redeem So at this moment, I will give you only one piece of advice You should keep yourself away from panic withdrawal and panic redeeming at this time And save yourself from redeeming money Because if you redeem money at this time You take a realised loss Which means that you invested Rs 100 and are redeeming at Rs 90 If you don’t redeem then it is a notional loss If some recovery comes there, then the price can go bank to 105 But if you redeem today You book an absolute loss of Rs 10 So you should not panic redeem here The third thing I am going to talk about is related to investment goal Now the talk comes that whenever you invest Every investment advisor tells you that your investment Should meet your investment objective That goal can be anything Can be the goal of child education, your retirement goal Or short term, if you need money in some time, it can be a goal for that as well So whenever you make an investment It is linked to your goal But when there is volatility in the market When there is panic in the market When there is a crash in the market At that time, the mistake people make is that they invest in such assets That don’t match their goals I will give you a small example Consider that your goal was for one year You need money after one year So whenever you have a short term goal it is preferred for you to invest in debt mutual funds Because there you get moderate returns and the risk is not that high And you should invest in equity when you have a long term view Now consider that someone invested for one year And they saw that there was a crash in the market At that time he feels like the stocks are very cheap He will remove the money from that investment and buy a stock So here, the biggest mistake an investor makes is that The debt mutual fund he initially bought That was linked to his goal Now the stock that he is buying, the goal is only for one year But the investment in a stock should be for a minimum of 5-10 years So whenever there is panic or a crash in the market A lot of people come out of their investment goal and objective and invest in such an asset Where they think that they can make very high returns So here I would like you give you this advice Don’t come out of your long term goal Don’t invest in such assets that don’t match with your long term risk and your personal risk Because if you invest there Your chances to make losses increases a lot And more important than loss here Your investment goal The chances of that not being fulfilled increases a lot So always keep your investment goal in mind And only invest in such assets That match your goal That align with your goals Now I will talk about the fourth important point which is Stay away from behavioural biases Now you must be thinking what behavioural biases are I had made a video purely on behavioural biases What happens in an investors life sometimes, is that a behavioural bias comes in They think that they bought a stock which is really good When it goes down, they buy more We have made a separate video on that, if you haven’t watched it yet There is a link in the description below You can go there and watch the video But I will try to give you a slight overview There are some behavioural biases like overconfidence Sometimes there is a lot of overconfidence in the mind of investors They think that the market is at the bottom now A lot of people get overconfident and invest all their money And when the market goes down more their confidence gets shook The investor that gets very overconfident When the market goes in the opposite direction, their confidence immediately gets shattered In that time of panic, there chances to make mistakes increases a lot So as an investor you should be confident Everyone should be confident when it comes to their investment But overconfidence can be very bad for any investor In a situation like this So you should not be adamant about any stock or any investment And apart from this a very important behavioural bias is confirmation bias You only read that news that confirms what your viewpoint is Consider that one of your friends told you that some share is very good and will give very good returns in the coming time After that there is a view in your mind that the share is very good After that you go to the internet or read research report only which tells you that that stock is good And you neglect that information That goes against that stock So you should always challenge your view You should find that information that is critical to your view So that you can make a broad decision So that you can take a neutral decision about which stock is good So that you can get good returns in the coming time and save youself from making that mistake Now I will talk about diversification, I have already spoken a lot of diversification before many times and told you Why diversification becomes very important when it comes to investment The meaning of diversification is that you invest your money in different assets So that whenever there is a crash in the market or one of your assets goes down, then you don’t make a big loss But this was about the past, now I will talk about the present Now there is panic and volatility in the market So a big mistake people make in this situation is that they don’t diversify At this time if you feel that one stock is very down And you like that stock a lot A lot of people go and buy that stock in high quantities So here there are a lot of chances for diversification to be missed When there is panic or a crash in the market So here it is very important for you to pay attention to diversification in your portfolio If you think that the market is at the bottom and you are buying a lot So you should pay attention to see whether you are buying in different assets In different stocks In large cap, mid cap, small cap So that your risk doesn’t get very concentrated Because if your risk gets concentrated in one place a lot And if that asset class goes down a lot Your chances to make losses increases a lot So pay a lot of attention to diversification If you are thinking of buying right now So this video we brought was purely for educational purposes so that this information can reach till you That in the moment of panic At the time of panic, how can you avoid taking wrong decisions And how you can save yourself from making wrong decisions So here it is very important Think twice before making any decision Think critically about every decision of yours Why can that be wrong? After that there are less chances for you to make a mistake If you liked this video, press the like button Comment down below and ask us any investment related question We will try to answer all your questions Apart from this if you haven’t subscribed to the Groww channel yet Then please subscribe Because we put up 2-3 videos every week on this channel for educational purposes Which can help a lot for you to become a good and an intelligent investor Happy investing!

47 comments

  1. Now market is low for example Axis blue chip fund NAV is down if I invest lumsum now after few months market grow will my invest grow??

  2. Mutual fund me invest start karne se pehle first time jo kyc karna hota hai woh groww app se online ho jata hai ya cams or AMC's ke office me hi jana padhta hai ?

  3. Sir can we sold the investment which we have made earlier at a price higher than today price and sell at times when stock is going up for a day and buy in it's correction phase again as a; stock never goes down directly ,and invest that amount in that share again for long-term at much lesser price.

  4. Capital markets regulator SEBI has allowed investors to directly access the infrastructure of stock exchanges for purchasing and redeeming mutual fund units directly from stock exchange.Please make a detailed video(Pros & Cons)

  5. Sir Maine Icici prudential Multicap equity fund me invest kiya hu Av sir Bahut jda down ho geya hey plus sir Kya Kare information dijye

  6. #askgroww
    Sir, in previous one year I invested near about 2 lacks rupees in mutual funds.
    and my current portfolio show losses about 35k. In such Current market I need about 1 lack for investment in investment in share market.
    If I redeem 1lack from my mutual fund account, it will be a right or wrong decision?
    please Give me a suggestion

  7. Sir kya ham grow app k jariye long trum investment kar sakte h jaise maine axis blue chip fund me sip ki hai av srif 2 mahine hue h

  8. 1yr experience in market
    How much should i invest in small/midcap for long term
    Now 80% in large cap
    My age is 20

  9. Sir I am doing sip worth rs.3000 per month now in large,mid, small cap equally
    I would like to increase my sip to rs 10000 per month . please guide me how can I properly diversify my portfolio.

  10. Hi sir, my age is 16 and i want to invest 500rs per month in index funds through Groww. How could i do that?Is that possible?

  11. True you should not panic. But you should learn why things are happening. I already saved around 25% of my portfolio amount as i redeemed my investment. The bounce is not going to be as fast as this dip. One will get enough time to invest back in the market.

  12. I want to start with SIP now but I have zero knowledge, so if I start with SIP on groww aap, do I need some consulting person or groww will take care?

  13. Best dependable stock video and very much understood sir indeed a numerous thank you to Mr Romero pieto who has indeed been behind my weekly profiting in Trading helping me to grow my Knowledge of investing making me earn more profit through his trading platform.

  14. Thank you sir
    & Groww team,
    Jagdeep sir aap ke kam ke liye bahot bahot shubhkamnaye , aapke team ko aur aap ko salam aap ke app se mere jaise naye yuva ko saving aur investing ki jankari deke jagruk kiya , aur adat bana li . 💐💐💐

Leave a Reply

Your email address will not be published. Required fields are marked *