Many of us are worried about the stock market or Equity market situation from here. Some believe that we are back to the same situation as was in 2020 – April. The growing numbers of COVID cases are a concern to everybody; the situation is not all good there!
So where are we headed?
Towards a deep correction or another panic fall?
My Answer is ‘No’! Absolutely
not …I have reasons to say this.
Let us see the recovery vs death case graph of Feb – March 2020 ( Chart Below )
As you can see the key reason for the market to fall in 2020, was the high %age of Death and low %age of Recovery. However it is different now – the recovery %age is as high as 98 and 99, so the market is not reacting in the same way as it reacted in 2020.
Secondly, we all have to understand that the equity market is all about perception – you have to create your correct perception to take advantage of others’ wrong perceptions. Like, your correct perception should be :
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“Since cases are increasing one may see the higher number of Deaths also, however the %age of recovery is still good and higher than 98%. So there will be a temporary loss to business but post-recovery it will be all back in place”.
On the contrary, one can create another perception also
” Since cases are increasing so high that medical facility will become a big issue and may result in the increase of death cases. Once the
recovery rate will come down and the death rate will go up, the market may take a nosedive”.
So ultimately, you have to decide your perception and stick to it – given below is the Nifty Chart for last week ( 12th April to 16th April 2021)
The above chart clearly shows that the market is not yet fixed on one-sided perception – traders have mixed views, and everybody is watching the ratio of Recovery rate vs Death rate.
Last week the market started with a negative bias and fell sharply on 13th April. Looking at the better recovery ratio, the market again recovered from its bottom of 13th April and recovered almost half of its loss to close at 14591 on Friday.
This is the time to maintain your investment positions and continue with your regular investments through SIP ( Systematic Investment Plan). Do not redeem or pull out any funds just for fear or market perception
Please call us freely at +91-99115-81705, 8447-01-02-03, or any of your RM at E-mutual Fund, if you want to clarify any of your doubts and need stronger views about the market.
