I got 3 messages from friends…’what to do ..markets have lost 400 points’…

I had a word with my broker..and decided to buy a few shares WHICH WE WERE ANYWAY PLANNING to buy. We had decided to buy them today as it was the last trading day – for FnO – last Thursday of the month.

No, I am not telling you the quantum of my buys or the names of the shares..but if it does interest you it is about 9% of my personal share portfolio, and I did not change the quantum of money. I would have bought these shares anyway.

Other than that some of the shares that I sold last week looked very attractive and I have not made up my mind on those shares. Tomorrow the market may react again – and I thank the cash that I am sitting on..so that I can buy some more stuff tomorrow also.

Frankly India does not have enough data on what happens when a country goes to war..so one will have to go to the US for data and market reaction. To the best of my knowledge whenever there is a panic, the market reacts far, far more than what is warranted. So if you are young and wish to have a long run in the market – upwards of 10 years – there is no reason why you should not be buying today.

What to buy?

Good question. Buy the index or buy the fund in which you are doing a SIP – your debit will happen on the 7th of the month anyway (assuming that is your chosen date)..so buy a little more today..and buy on 7th also. My advice has always been to keep buying more when you get an opportunity.

If you are not comfortable with that go and buy a MID CAP FUND…the midcap funds are likely to take a bigger hit than the Large cap funds. Surely Pakistan has enough brains not to counter attack.

However, if it does become a full fledged war (I have no clue whether it will, but I am of course hoping that it does not), do not be in a hurry to buy..buy slowly. Buy the index, and be ready to trade out in 20 days….the recovery will be just as fast as the fall.

Having said all this, you could also buy in 2-3 lots. For e.g. if you decide to buy Tata Investment corporation – it looked attractive at 680..but is now available at 588..i would pick up say 1000 shares out of the total 3000 that I wanted to buy. So it will be 1000 at 588 and then wait. If there is a further fall tomorrow morning (30th) pick up another 1000 shares. However, if it does not fall below 588..you need to sit there with patience. Or buy it at 612…on the way up. Pick up enough so that you can keep selling a portion of that at prices of 680…as and when…

Impact of War on Stock Markets

 

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  1. “..However, if it does become a full fledged war…”..

    Depressing to see all the buffett phonies clamour for war so they can buy few more shares and brag about it.

    Waiting for all forms of successful, intelligent,stable,peaceful, contrarion, uneducated, unstable,notsosuccessful investors to come out of the woodwork.

    SIGH …SMH

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