Markets fall but no reason to panic

[Deepa Nittala]

Hi All , 

As you see in NEWS , Chinese markets have had biggest fall in 2 decades and today has fallen by 7% . Indian Indices have fallen close to 2% . But let me clarify , that sensex has only 30 stocks and Nifty has 50 stocks . So, it is not necessary that if indices have fallen by 1.7% so far , your funds will erode to the same extent . A large cap fund has atleast 40-50 stocks in them , not necessarily from indices. Mid cap funds  have 50-70 stocks. 

So , as I write this mail , I would like to quote certain examples. 

Sensex  1.% down on 06/01/2016

Principal Large Cap fund : -0.29%

Principal Emerging bluechip Fund ( MID CAP) : + 0.16% up 

Principal Growth fund ( multicap)  : -0.42% 

This is an example to indicate that diversification minimizes losses . Also , you are investing in a systematic way , so losses definitely minimize further. 

So the message is " NO PANIC" required. Remember , these investments are for all your long term goals . The lows today and this year ,and in near future are only a point to rejoice according to me , since it has given you opportunity to systematically buy when markets are low for a good long period . The only country which has an optimistic growth outlook among global economic gloom is INDIA . However , we are not working in isolation and hence , what happens globally , politically ,does effect us to some extent . But our fundamentals are the ones to define long term growth . Our participation is crucial for our growth and also the country's .

What not to do : Do not panic and redeem 

What to do : Identify small surpluses , invest during every fall apart from the SIP and STP's which are already happening . 

Do not miss these falls , as they are opportunities . Think these are discount sales apply same behavior and logic. Buy low, redeem long term  . 

Please write back in case of any clarification . 

Thanks

Best regards

Deepa