In the stock market, for a discriminative investor, there is no victory or defeat but only permanent effort. One who accepts the loss and gain situations with equanimity of mind is the final winner. I may sound a bit philosophical, yet this is true. Investments are a game of arithmetic and analysis, and also they are one of the important mind games. One’s attitudes in dealing with the complexities of the market are vital in a negative market.
Negative market refers to the bearish market, when the investors remain confused, and the market swings unpredictably. Mostly it is the downward swing. One needs to refer to the basics of stock market and how it functions, before understanding the positive aspect of a dark situation. It is not possible to list out all the factors that influence the price of a particular stock.
One fundamental aspect needs to be remembered at all times, that holds good in all situation– The price of the stock depends on the performance of the company.
Other influencing factors may vary and impact the price in degrees. The economy of the country as a whole and the political scenario are other important factors that may lead to hamper the smooth running business and tell upon the price of the stock.
To stay positive is the quality that needs to be practiced at all times by an investor, but when the market goes through the motions of downward swing, it is the testing time for one’s patience.
The important point is no negative aspect in the trade is going to stay forever. It is a passing phase, but how long it will last is the moot question.
In between the bull and bear phases lies the important phase of correction. You are not a casual visitor to the market. You have entered this business to stay and you have short-term and long-term goals.
You have no other alternative but to stay positive and wait and watch to grab your opportunity.
Stay focused in a negative market. Just watch the swings in the market without trading for some time. Do not work through the storm and allow the dust to settle down. Do not be panicky and sell the stocks without rhyme or reason. The fruit of your patient wait for all these years may be nullified with your unguarded approach. As the demand for stocks is low in bear phase, you will be in for distress sales, and the returns that you get are very low. Some of the best investments are made during bad times of the market, and this is the reward the successful-investors/”title=”investor ” >investor gets for staying positive during a negative trend in the market.
The meaning of staying positive in negative market
- Stay focused.
- Try to buy the blue-chip shares as they will be available for low price, when the bearish trend persists in the market.
- Do not follow the crowd. Take decision to buy/sell on the merit of each share. Do not buy just because others are buying and do not sell when others are selling.
- Hold on to the position. Do not get upset by small pullbacks.
- If possible, get on board with the trend; do not regret over a missed opportunity. Thousands of companies and ample opportunities are available to you in due course.
- If you are an aggressive trader, this is the time to control that aggression. Wait for normalization of the conditions in the market.
- Be selective as for the trades and their sizes.
- Know for certain why your shares in the portfolio are worth keeping.
- Do not react with panic; respond positively. Avoid discussion with people with negative approach. Interact intelligently, where it is necessary.
- Review the various options available to you.
The one area where you need to be in constant communication is your internal world; you are the best judge of the circumstances around the stock market. Sail through this turbulent ocean, with the oar of your past experiences.