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What should a retail investor do amid the current panic and subsequent sell-off?

If you are a long-term equity investor, just hang on, says Dhirendra Kumar

What should a retail investor do amid the current panic and subsequent sell-off?

For six consecutive months, FPIs were net buyers until the month of March' 20. Soon, they turned into net sellers, pulling out of the market. What should investors do and what's your take on this?
- Anonymous

Yes, there was and there still is a virtual panic in the markets not just in India but across the world. Everybody is pulling out of equities and understandably so. But with the governments across the world taking preventive measures, the Coronavirus may not be as fatal for people as it will be for businesses. All of this is mutually creating a grim outlook for the economy in general and for specific sectors.

However, be prepared for this situation to continue for a while, as it's difficult to precisely estimate the loss in the short- or medium-term and the long-term implications of all these. As of today, all of it will be nothing but a wild guess because this crisis is still underway - every day the mood changes, the thinking changes, the actions change and even the numbers are changing.

Having said that, if you are a long-term equity investor, I don't expect this to last beyond one year or so. So, keep your fingers crossed. But it is such a big uncertainty that understandably, people are running away from equity. Running away has caused all this havoc in the markets. The markets ending in red on some days and green on the other is a reflection of this confusion. So, if you are a long-term investor, hang on and if you accidentally came by, then you have a reason to worry.

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