So the Indian stock market has fallen.
The exact market levels may vary but the result is always the same. Lost opportunities for profits, disappointment, and of course financial losses.
Whenever the stock market crashes, everyone hears about it...and everyone talks about it.
In fact, everyone loves to talk about it. Even those with no money invested in the market will have an opinion about the crash.
The media dutifully does its part. Headlines speak of Rs 'X' lakh crore in wealth, wiped out in a day.
Every fall in the stock market also teaches old lessons to many investors and traders. The reasons why the stock market falls is different every time. The stocks that fall the most are also different. But the reasons why people lose money is always the same.
The reasons for the losses are usually found in their enthusiasm during the preceding up move. The market fall exposes their over investment during the up phase.
People lose money in a market fall not due to the fall itself but rather due to making bad investments and overextending their trading accounts when the market was going up.
And when the market tide turns downwards, as Warren Buffett said, they get caught naked.
When times are good, investors and traders believe their stock picking skills are responsible for their profits as opposed to a rising market tide lifting all boats.
Thus, they become overconfident and make investments in fundamentally poor stocks. They also tend to over allocate funds to these stocks. Some even borrow on margin. This exposes them to the dangers of a market decline. It's only a matter of time before they get hurt.
Thus, we can see that the reasons why people lose money during stock market declines are predictable and can be avoided.
Here's a list of articles and videos explaining why the Indian share market may be falling. This is a great starting point for anyone who is looking to stay updated with the current developments of Indian share market.
Mar 24, 2024
These top-performing stocks have experienced a decline in the recent market crash. Should you buy?
Mar 1, 2024
The return ratios of Dixon and HUL are almost at par but there is a huge gap in valuations.
Jan 11, 2024
Are you buying an insurance against a foreseeable macro risk?
Dec 18, 2023
Why buy 96% of the stocks when just 4% can help create wealth?
Nov 24, 2023
How should you think about a potential market crash in 2024? Read on...
Nov 1, 2023
Why buy 96% of the stocks when just 4% can help create wealth?
Oct 27, 2023
Was todays recovery just a dead cat bounce?
Oct 19, 2023
The BSE Sensex fell 248 points while the Nifty ended down by 46 points to close below 19,650.
Sep 12, 2023
My Contrarian View on the Smallcap Rally.
Aug 18, 2023
Indian markets were dragged by IT stocks, tracking a slide in global markets on rate concerns. While deflation and demand worries in China added to concerns.
Mar 18, 2024
How should investors approach the current market?
Jan 21, 2024
What can cause the stock market to crash in 2024? Find out...
Jan 1, 2024
Are you buying an insurance against a foreseeable macro risk?
Nov 30, 2023
A 5-point checklist for Smallcaps.
Nov 14, 2023
Why buy 96% of the stocks when just 4% can help create wealth?
Oct 30, 2023
How should you make investments in the stock market now? Find out...
Oct 20, 2023
The BSE Sensex fell 232 points while the Nifty ended down by 82 points to close below 19,550.
Oct 13, 2023
Benchmark indices are trading on a cautious note today after the latest US inflation data bolstered bets on Federal Reserve rate hikes.
Aug 30, 2023
Indian markets fell sharply during closing hours as banking stocks fell. Despite the fall, benchmarks ended in green for the third day with marginal gains.
Aug 11, 2023
Will junk stocks do better than fundamentally good stocks in this market?