The Indian Stock market has been falling for the past few weeks. From a peak of 36,283 reached on January 29, 2018; the Sensex fell by 10.2 percent. Given the high valuations of stocks which are not backed up by corporate earnings, many analysts opine that the market correction is overdue. Markets may fall further as the P/E ratios of stocks are still higher.

Moreover, some brokers like UBS Securities predict that Nifty will close at 10,500 by December 2018. As Nifty touched the 11,000 mark in January 2018, a target of 10,500 by the end of 2018 means no positive returns can be expected from the stock market for the year.

What should the readers of OmniSay do now? Should you stop investing till December 2018? Or, should you sell your equity investments and transfer the money to debt and reinvest it back in equities in January 2019?

If you are contemplating to do any of the above two alternatives, they you would be committing one of the original mistakes of a stock market investor. Namely, trying to time the market!

best strategy to follow during a market correction

Stay Invested and Continue Investing During the Market Correction

I would all my readers to do only one thing. Stay invested and continue investing. Remember that market performance is irrelevant for a long-term investor.

Stock market corrections are common. There is no need to panic and sell your stock holdings. In fact, selling your holdings might result you in losing on your investments. Nobody can predict the future performance of market accurately. For every negative prediction regarding the market, there is a positive prediction. There are analysts who opine that Nifty might touch 14,400 in 2018.

Selling your holdings will result in missing any market rally if the market conditions change. Hence, the best strategy to follow during market corrections is to stay invested. Other than staying invested, continuing to invest regularly will also help you in taking advantage of the market correction. Every dip in the market is an opportunity to buy a stock or mutual fund unit at a cheaper price. Even if Nifty closes at 10,500 by the end of the year, you could make some positive returns on investments made when Nifty trades at a lower level than 10,500.

Remember that adage: “The best time to buy is when the blood is flowing on the streets”. Some blood does flow on the Wall Street or the Dalal Street when the market corrects.┬áIt is up to you to stay disciplined and benefit from such corrections.