SELLING OUT MEANS SHELLING OUT

The wild swing of stock market is putting us in defensive mood. Nobody is certain in which direction the stock market is going to take its next course. Pundits are of the opinion that it may further go down in a month or two for some weird reasons which are very complex to comprehend for a RSHI.

Now the question from small investors is: "Should we sell out everything we have in market to cut further losses?"

Now the answer is a "No, absolutely not".

The reasons are:

• The present volatilities are the inherent characteristics of any stock market in short term perspectives. We should not worry over it. It is shown historically stock investment in long term perspective has always yielded positive gains. It is more so in the emerging markets.
• Let's take, we have sold out our position in order to reinvest when the market is at bottom. So that when the market goes up our new investment will go up. Selling high and buying low, Simple logic. But can anybody correctly identify the bottom. answer is again a "No". The seasoned investor never tries to achieve this particular feat. We small investors mostly end up buying above our selling price. One famous pundit said once that it is a fallacy for a small investor is that, they always end up buying high and selling low.
• Timing the market is nothing short of gambling. The odds are always heavy in gambling. So if we are not sure what the market is going to be tomorrow, we should simply stay invested till the wild YO-YO of the market is over.