How To Recover From Losses In The Indian Stock Market

By Author: Vamsi Krishna
Total Articles: 27
Comment this article

So you are glued to Indian share market live on TV, wondering what shares to buy today. But the unthinkable happens – the prices of the shares you have bought go into free-fall, giving you palpitations. So what do you do when you see online share prices fall? How do you recover your losses on the investments you have made in the Indian share market today?

There’s no easy answer to that question. No matter how many hours you spend watching the Indian share market live, doing extensive research, being careful with your investments and so on, there’s no telling which way the Indian share market today -- or tomorrow, or the day after -- will behave.

You can cut your losses, but there’s always a risk in investing in stock markets that you must be prepared to face. Past returns are no guarantee of future performance.

Here are some pointers for a safe journey through the Indian share market:

• Cut your losses: Don’t put good money after bad. When a stock isn’t doing well, sell it. Don’t wait for its price to recover; it may never happen.

• Don’t try ...
... averaging tricks: So you’ve bought a stock at a particular price, and the price drops. So it’s a good opportunity to buy that stock on the cheap and average your overall cost, right? Wrong! There’s a reason why those stock prices are falling, and that’s got something to do with the company’s fortunes. Don’t bet on the price of that stock rising again, unless you’ve a perfectly good reason apart from a hunch.

• Find out the kind of stock you have: Your decision to sell a stock whose price is falling may depend on the kind of industry it’s in. If you have a cyclical stock and the economy is not doing well, stock prices are bound to be in a slump. These include stocks in sectors like automobiles, airlines, furniture, clothing, hotels and so on. What happens is that people tend to buy more cars when the economy is doing well, and less so when things are going badly. So if you have a cyclical stock and the economy isn’t doing well, hang on it. It may do well in the future.

• Spread your risk: Certainly, the stock market is the place to be if you want to maximize returns over the longer term. But don’t put all you eggs in one basket; there are other things you can invest in – fixed deposits, PPF, gold, real estate. The mantra is diversifying.

So if you’re just itching to get back in the game and can’t help checking out online share prices and checking out what shares to buy today even after a loss, remember the above.

Author Bio :

Ritish Kumar is a finance enthusiast and a keen observer of the Indian share market today. In this series of articles, he talks about investing in stock market and staying profitable. online share prices, Indian share market live