As of 9 Feb 2023, It is quite imperative from the Tech Layoffs that we have entered into the recession leaving us no choice but seek a sound stock market advice. Although Mr. Market appear to move sideways at the moment which is majorly because of FIIs Investment offsetting the sell off by Retail Investors.
Well, you can ask what the Big Investors are doing. They have their own strategy. Some will just hold the position saying this is just another low tide and stay invested. Some might even invest more saying they are getting the stock at cheap (not in terms of price but in terms of Price to Earnings). Hence you should have your own strategy and stick to it.
Value Investing (Ramdeo Agrawal)
If you are have a Value Investing mindset, then this is the right time to accumulate the cheap quality stocks. Use my favourite tool Tickertape to find the PE Ratio of a Stock (under Key Metrics section). Also you can use the Market Mood Index developed by Tickertape to open a new position. Alternatively you can employ Technical Analysis to find the right entry point. As you cannot exactly time the market, just buy the dips. Trendlyne provides a paid screener, which screens the stocks based on various scores like Value, Momentum and Durability. It could be a nice handy tool have.
Coffee Can Investing (Saurabh Mukerjea)
If you’re in the Market for a long game, just sit tight and get relaxed, Market is going to rebound but don’t ask me when. But it’s a nice time for you to identify the bad stocks of your portfolio. Thumb Rule: Good quality stocks won’t react much to negative news. If any stock bleeding your portfolio at a high rate, then it’s time to exit the position, even at loss. You can learn more about Coffee Can Investing. If you’re someone who don’t have get time to do any research, not the skill to crunch numbers, better go with this Strategy.
Short Term Investing or Momentum Investing (Alok Jain)
But In case if you are a short term investor, you may have to take a bet on whether market or Individual Stock swings up or down which might be quite uncertain given the current situation of economy. Better to stay away for sometime from the markets, since the market is running sideways in short term. I personally have tried the Momentum Investing, I coded the algorithm on Python and I acted accordingly, but my emotions precede me and made me withdrew from all positions leaving me in stop loss situation.
It is very much observed that, during recession move their holdings to Assets like Gold to preserve value or hedge the positions in Stock, as they call it. Alternatively, people can try investing in Cryptocurrencies like Bitcoin which is very much equivalent to Gold. Also, it may or may not be a good idea to move money to other physical assets like Real Estate as say it there is limited land and Population of India is growing day by day. But they rarely talk about Floor Space Index.
Note: High Networth Individuals hedge their portfolio with F&Os. I know the person who reads this article won’t be a HNI. But I guess that’s what their Financial Advisor do. More on this you can find here.
Want to take a plunge into market but don’t have Demat and Trading Account yet? No worries, Signup with Zerodha or Upstox to start a safe and sustainable journey.
If you have any constructive advice or even destructive advice of the matter, please do comment and let me know.