Tips on how to Deal with Inventory Market Volatility in 2022

Are you worried about the stock market volatility and indecisive how to handle it?

Let me share how a long term investor can use the current market volatility to his advantage, further, how I am dealing with it right now.

So without much ado, let’s begin.

Why is Stock Market So Volatile?

Do you wonder why stock exchange are so volatile?

One country decides to attack its neighbour, and the Indian stock market is down by 5 %. The next day, still the attack is on, but we are up by 3 %.

Can anyone explain what is going on?

Similarly, Corona Virus compiled the Indian stock market correct by 40%. Nifty from high levels of 12 k came down to 7.5 k on questions of 4 to 5 weeks.

Nothing changed to the virus, yet the Indian stock market was back from where it started falling.

We may know the answer is liquidity, but the question is, why stock markets are so volatile?

The question is, WHY?

The way I see it is, stock market are future-looking. So they try to discount the future.

So anything unknown in the market meets it jittery.

What is the effect of the virus- sell sinks How will the fighting significance the world- grocery sinks

How to Handle Market Volatility in 2022?

Nifty has been in a range of 2000 points for the past seven months. Below we meet the following chart of Nifty 50 for the past six months.

There is no direction.

Further, there is a gap down one day and up the other. So it is killing sellers on both sides.

The good news is investors have the upper hand. There are three ways to handle this volatility.

Do Nothing- Don’t look at your broths. They should be of high-quality assets for anyone to do nothing. Buy the Dips- Add more for every 5% chastening in any of your broths. Sell on rising- For eras when the market is higher, sell assets you don’t want to own for the coming decade and elevate the money levels.

I am make all three.

For broths like Divi’s Labs and Pidilite, I am doing nothing.

For assets like Clean Science Fine Organics, I am buying the dips.

I am offloading to raise cash positions for broths like TTK Prestige that I don’t want to own for 10+ years.

Some Questions Considering Volatility of 2022?

Some blog books have asked me questions related to the volatility of 2022. So let me answer them here.

Should I Sell my Stocks When Business Are Volatile?

It depends on your view of the market, and can you remain invested for the time frame where you think the market will remain volatile.

So if you think the market will remain volatile for the next year or so but you can’t remain invested for the next couple of years, you should book out of the positions.

However, if you can remain invested for 1+ times more than you think the market will remain choppy, you shouldn’t consider selling the stocks. So yes, you can look to book out of low-quality stock and invest in better stocks.

Should I Buy Stocks when Prices Fall?

Yes, if you have the cash, you should consider buying either high-quality furnishes or starting a SIP in some of the best mutual funds for 2022.

The volatility is not here to stay, and at some phase, it has to fade away as well. So if you can ignore the volatility, you should consider buying enormous business available at a discount.

Remember, after your purchase, the stock price can fall. So you should be prepared for the same.

How Can I Limit Losses to my Portfolio in a Volatile Grocery?

The best practice to restriction the losses in a portfolio is to invest exclusively in huge companionships. But, unfortunately, good is insufficient to and only the great companies.

The question is how one can identify great companies.

I do it with fundamental analysis, business checklist and investment checklist. Then I use technical analysis to try to invest at a better price.

Final Thoughts

The market has always been volatile and will ever remain volatile. Therefore, potential investors must treat the stock market volatility and make it an advantage.

Many notebooks and sections online say that you don’t have to pay attention to the volatility. The question is when you have your hard-earned money gave, you can’t ignore it. It’s practically not possible.

Not watching your portfolio take a 50% hit when “youve got to” too remain at home doing nothing isn’t essentially possible.

One can keep calm if one has invested in top excellence fellowships because I can say for sure that only being a long-term investor is not enough.

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