Why Indian Markets fell on 24 August and continued to fall further till 1st week of September?
1. Chinese markets is in disarray as China is not able to sustain the growth rate it has achieved consistently over last 3 decades.
What this has to do with India. As far as I see, China is our main competitor. Low labour cost is our biggest arbitrage. Plain common sense says that disorder in your competitor house means good business for you.
2. Fed’s dilly dally with the rate hike.
Again what India has to do with Fed. Our problems are totally different as we are rooting for a rate cut in India.
Real Reason :
There is as much money to be made in falling market as in rising market. Big players just change direction. Indian markets fell as FII(s) started shorting futures and DII(s) just played along. Markets run on fear and greed principal and its only aim is to make people like you and me to part with their hard-earned money. You would soon see once they have created enough fear, markets will start rising till the time people get greedy, fall in the trap and they start buying.
Doesn’t matter how bad or good the conditions are, the markets will continue to fall and rise. This is the only truth about the market and rest is just BS. To play this market you need a lot of skills to diversify your holdings and guts of steel to not flinch and keep buying as the markets go down.
Analysis & Advice:
Stock market is not meant for ordinary people. It looks simple though to click F1 button to buy and F2 to sell and there are enough stories circulating that people have amassed riches from this market. Reality though is lot different. There are cannibals in this market and they feed off on the flesh of your hard-earned money for the living. Stay away from this market. Do not yield to temptation of trading short-term in futures and options. Make a SIP of ETF(s) and live a simple ordinary life. Don’t try to become what you are not.