Investors must hold stocks of companies whose fundamentals are strong.
The Indian capital market is in the doldrums. There has been a large fall of over 3,000 points in a span of 21 days. What is worrying is the very steep fall in very short time span.
Our capital market has now become a global market. International opinions and events have impacted and will continue to affect our market.
What should one do in such a situation, particularly small investors? According to me, the Indian economy is very stable and growing at over 8%. Our growth story continues. In the stock market, the fundamentals are supreme. Economic and corporate fundamentals of our economy are strong and we are likely to perform better than other emerging markets of the world. Investors, who had purchased shares before the fall, should hold on to them if the fundamentals of those companies are solid.In a falling market, the investor, rather than panicking, should think of buying. Stock valuations improve in a falling market.
Hence, one should be courageous and buy shares, taking a six-month to one-year investment horizon.
The writer is chairman of KR Choksey Shares and Securities.
