How to Invest in Market Crash
Whether it's a bull market or bear, bottom up approach could give you several opportunities in any market
This is a very important question newly investors always ask. It's very difficult to invest in a market crash because market can crash more. Faint hearted people sell at the bottom and buy at the top.
There's no exact formula to catch the bottom or top of the market. So what should be done here? None can identify the top or bottom.
There's a famous saying that market can remain low longer than you remain solvent.
One should be aware of the economy where it is going. This might be very complex because a lot of macro things you need to keep your eyes on like elections, interest rate cycle, war, slow down of the economy, and so many things.
Or one should be aware of the businesses one is going to invest. Best way to see this is to invest in a good business at a fair valuation. Just stick to this principle. You will get several companies in a market crash. And that is the best time to look into such companies.
Whether it's a bull market or bear, bottom up approach could give you several opportunities in any market.
So the question is can you identify great businesses or ideas in this market crash? If yes, then the next question is can that stock go lower? If yes, then invest in a staggering way, in phases, like 50-30-20 or 20-30-50 or 25-25-25-25 or something like that. It may not be in a particular order.
Experiment with this method once. I believe you will be greatly benefited.
Thanks
Rabi
Disclaimer: I'm not SEBI registered. This content is for educational purposes. Do your own diligence.
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