“But now you need to be patient because markets haven’t done well in the last few hours and might not do well for a few more days,” says Raamdeo Agrawal from Motilal Oswal Group.
On Mumbai’s Dalal Street, people ask Raamdeo Agrawal for advice during market panic. Should you buy during this panic?
If you’re an investor, the choice is clear: you need patience, which is very important. Everyone likes to be in the market when it’s doing well. But now, you need to wait because markets haven’t done well recently and might not for a few more days. Your returns, which might have been 30%, could drop to 25% or 22%. This is how risk works. The market can swing from one extreme to another. Yesterday, the market was at an all-time high, and today, it’s dropping significantly. This is normal for markets. Investors shouldn’t worry, but speculators might have a problem.
The election results show the current government might return with a weak majority. Is this priced into the market?
Yes, if the information is available, the market has likely priced it in. The market has already dropped 5-7%, wiping out about ₹40 lakh crore in market value, which is almost 10% of the total market cap. Losses in smaller stocks are likely higher. Is the drop over? It’s hard to say, but most of it is likely priced in.
If there’s a change in government, could there be more damage? Yes, that’s a different and now possible scenario. If the government formation isn’t smooth, markets might react badly.
At what point would you buy? If a stock I want to buy hits my target price, I’ll buy regardless of the market. Right now, it’s a buyer’s market. Yesterday was a seller’s market. Expect some more correction. Another 5-10% drop could happen. But eventually, a new government will settle in, policies will stabilize, and the market will recover.
Is there value in buying rural and consumer stocks now? Yes, because the last five years focused on investments rather than consumer spending. This might change, leading to new market leaders.
How do you see the market in the next 12-18 months? With this mandate, we might not see great returns in the next year. Much of the recent gains might correct, leading to low or no returns in the near future.
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