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Focus On Your Goals

Focus On Your Goals

Whether you call it Black Monday or Bloody Friday, it makes no difference. The market is fast spiralling downward. And today, when the Sensex dipped below the 8000 mark, there were a number of predictions that it could go as low as 5000 over the next six months. Frankly, no one knows where the market is headed. But today’s volatility did catch many by surprise. The market opened at 8599, touched a low of 7697 before recovering to close at 8509.

Global recessionary concerns, apprehensions that government measures will fail to support growth and company earnings will falter are all genuine. Though SBI reported better-than-expected earnings, its stock was hammered simply on concerns that bad loans will rise. FIIs are dumping Indian stocks to send money to their home markets, reeling under a credit and cash crunch. In the process, not only is the stock market falling but even the rupee is being hammered. The situation does not look like it will improve in a while given the continuing U.S. dollar strength, bearish sentiment towards emerging economies, and the persistent outflows from India.

Meanwhile, Wall Street is currently down in early trading after stock markets around the world tumbled further on worries about the global economy.

Despite all the gloom, you need to know that the short-term direction of the stock market can always be adverse. So don’t sell in reaction to market moves or else you will end up selling low, having bought high. We have no doubt that you are watching the news intently, but don’t let it stress you out. It's undoubtedly informative but not always helpful for long-term investors. All these ups and downs have no bearing on your long-term goals.