Stock Market: Navigating Corrections: Stay Calm, Stay Invested

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Know How to Survive Stock Market Crashes

By S Jha

New Delhi, April 7: Stock markets undergo cyclical corrections, triggered by events of global footprints. Global stock markets on trails of US President Donald Trump’s tariff announcement went into deep corrections.

The global equity markets suffered worst losses in several months on Monday. The fear of trade war between the US and China has set tremors in equity markets.

Angel Broking in an advisory to clients shared tips to survive stock market corrections. It said: “Just like the tides of the ocean, financial markets have their highs and lows. While bullish rallies are celebrated, bearish phases and correction periods often test investors’ nerves.”

It also stated that “with the right mindset and strategy, these downturns can be managed—and even turned into opportunities”.

Angel Broking quoted legendary investor Warren Buffett, who said, “Successful investing takes time, discipline and patience.” Understanding this is the first step in navigating market corrections without losing sight of long-term financial goals, added the brokerage firm.

“Market corrections are a natural part of the investing journey. Historically, equity markets have shown a strong tendency to recover over time,” it added.

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The brokerage firm also stated that “these pullbacks, while unsettling, often pave the way for stronger, more stable growth phases”. “For long-term investors, they can even offer golden entry points into quality assets at attractive valuations,” added Angel Broking.

Advising an Alignment of portfolio with risk appetite, it said: “During volatile phases, it’s crucial to ensure that your portfolio still aligns with your risk tolerance and financial objectives.”

“If not, consider rebalancing—adjusting the mix of assets to maintain your intended risk profile. Rebalancing can also help take advantage of lower asset prices during corrections,” added Angel Broking.

Also suggesting the use of derivatives to hedge risks, the brokerage firm said that “for more seasoned investors, derivatives can be an effective tool for managing downside risk”.

It cited: “Take this example: an investor with a portfolio mirroring the Nifty 50 index fears a short-term market drop. By selling Nifty 50 futures contracts, they create an offsetting position.”

The brokerage firm argued: “If the market indeed declines, losses in the equity portfolio are cushioned by gains from the futures position, thereby reducing overall risk exposure.”

On the emotional side of investing, it said that “perhaps the most challenging aspect of a correction is managing emotions. Fear-driven decisions can often derail even the best-laid investment plans.”

“Staying calm, thinking long term, and avoiding panic moves are key to weathering the storm. Strategic thinking and emotional resilience go hand in hand during uncertain times,” added the brokerage firm.

It also counselled that “corrections are not the end of the road — they are part of the journey. By staying informed, staying invested, and sticking to a well-thought-out strategy, investors can navigate turbulent markets with confidence.”

(Disclaimer: This article makes no recommendations for any kind of trades in the stock market)

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