The burning question that investors have in their mind is what to do with their investment? It is quiet unnerving to see value of investments fall down by 20-50%. But ask yourself a question, when there is a sale of up to 50% off in a mall what do we do? Do we join the sale with goods lying in our house or do we buy more?
You got it right. I do not need to answer the above question. So dear readers, you have answered your question about what to do with investment yourself. The question to be really answered is not whether to invest or not. But, the question to be answered is, where to invest and what to buy?
I have received numerous calls asking for a tip or an idea of what to buy. Most of the callers expecting a stock idea. But, at this point it is difficult to spot the next sector which will lead the market.
If we analyse the past major rallies and corrections we can find that every rally is fuelled by one or two sectors.
- The years till 2000 saw sharp moves in IT sector. No one had a clue which sector can move next.
- The years till 2008 saw Power sector and infrastructure sector have bubble valuation
- The years till 2020 saw bubble valuations in Banking and financials.
No market participant can tell with surety about which sector or which stock will move up next. Because of Corona one cannot access the impact it has on industries. If we look at our daily lives Corona has negatively impacted the following industries directly
- Transport (Aviation, Railway, Buses)
- Hotels
- Industries where large scale labour is used
- Oil & Gas industry
On the brighter side, it has done some positive for the following industries
- Healthcare & Pharmaceuticals
- IT sector
- Insurance companies
Chances are that many foreign companies may divert to India if we can curb growth of Corona and shift their manufacturing facilities from China. Chances are there that we can grab China’s share in Textile and Chemical sectors. Chances are there that the rise in medical costs and prices of basic medications will continue and help in profits of Healthcare and pharma companies. Chances are there will be growing awareness in purchase of health insurance and standard of health will still further improve with people going for good treatment because of medical insurance. IT sector will shift from current offices to work from home models.
China having cut down its production has low levels of inventory. They will take time to start exports. Moreover importers will be reluctant to import from China for some time. Stock of Chinese goods in our country is low as compared to past and chances are that our local manufacturers may be able to grab the opportunity.
I am not commenting on current situation or how grave it can be, but there is a silver lining to this dark cloud.
If you feel like others that world is coming to an end, look at your living habits. Have they changed? What impacts us impacts others. The way we have to change, others have to change. If you feel that because of corona nothing has changed except our habits of washing hands, covering nose and mouth others do the same. Remember such events have occurred in past and mankind has always won the battle and rebounded back with double force.
Don’t try to spot stocks. Invest in Mutual Funds. Mutual Funds are diversified and fund managers know what is to be done better than us. One can start investing rather than waiting for markets to fall further. Remember, such opportunities rarely occur once in a decade. DO NOT MISS THIS CHANCE OF INVESTING AT 20-50% DISCOUNT. “Participate in this Corona Sale.”
EVERY RISE HAS BEEN LONGER AND LARGER THAN EVERY FALL