Dalal Street unsettled
Experts emphasize on reasons to buy stocks as Dalal Street is unsettled.
They produce the theory – “Buy when there is fear in the market and sell when there is greed”. To support the theory, they cite three reasons.
The current market setup suggests the first reason i.e. fear and advise that investors should buy the fear instead of sitting on the sidelines & doing nothing.
Firstly, the current volatility in domestic stocks has more to do with external factors compared to internal Factors. While there have been concerns about a slowdown in the growth of domestic economy and a slump in consumer demand. India is still ahead of the rest on global basis with regard to growth momentum.
Secondly, historical data shows market returns have been generally higher in the post-election period than in the pre-election period. At least that was the case in last three instances.
Thirdly, fear gauge has risen considerably this year, hence making investors nervous, which also is an election-linked syndrome. Source ET