Written by Onionuttapam
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Friday, 26 September 2008

Mumbai - Broker Ashwini Gujral advised small investors to keep their calm, even as Sensex plunged by another 400 points today.

"Small investors need not panic every time there is a sharp fall in the markets. Leave the panic to professionals like us who are trained to handle sharp downturns and who panic only when the situation calls for panic," said Mr. Gujral.

"Stock market crashes come in varying sizes and proportions. Every crash in market doesn't necessitate a full-blown panic. Individual & small investors are not able to differentiate between the calamitous qualities of different crashes and unfortunately panic at the wrong time creating an actual panic-like situation which forces us to panic even in conditions which do not actually warrant a panic.

"My advice, therefore, to the retail investors - Please leave the panicking to the experts. Please let the professionals decide when we need a panic. We have access to technical charts which allow us to decide when the market condition is appropriate for panicking."

When asked what retail investors should do in the face of sustained sell-off being witnessed, Gujral said "Do nothing. Do not keep looking constantly at stock tickers. Avoid monitoring your portfolio. There is a life beyond stocks. Take a break. Go out and live that life. Take a vacation. Take your kids out for movies. There are a million activities you can do. Do whatever suits you, except for panicking. Leave that to us. That's our job, we know when to panic and when the situation is ripe for panicking I assure you we will let you know.

Meanwhile, Shailesh Kotak of Kotak Securities advised investors to remain calm and hold on to their long-term stocks. "Long-term investors should not monitor their portfolio on a day-to-day basis. If you have good stocks in your portfolio, stay invested for now. Now is not the appropriate time to panic. Technical charts indicate that a small rally is on the cards which can take the Nifty up by 150 points. Investors should use this rally to get out of their short-term trades, but keep the long-term stocks intact in their portfolio till the appropriate panic time which the charts indicate should come next Friday. Investors would have plenty of time to panic on the coming 'Black Friday' when technicals indicate a massive sell-off which could wipe 30-35% of market cap. I would therefore advise investors to stay calm till coming Friday."

Prashant Hegde, equity and commodity analyst at Sharekhan.com joined the chorus of brokers and analysts, advising investors not to panic. "The present downturn in market conditions is just a very 'healthy correction' and doesn't call for panic. There is a possibility of few such 'healthy corrections' which could result in sensex breaking down the 200 DMA barrier within few days. As and when that happens, the situation would turn around gravely and give rise to conditions that would justify a panic. But till then, investors should avoid getting jittery, stay calm and ride out the storm."

"While there is a need to be constantly vigilant in tumultuous market conditions that we are witnessing, we advise buying on dips and looking for growth stories - stocks that are near their 52 week lows stand a very good chance of moving upward until Friday, when like all stocks they too will be severely beaten down" said Ambiresh Mishra of Karvy Securities on CNBC today. "For those who are risk-averse, we particularly like defensive plays, such as FMGC and Textiles, which we think will hold up well prior to collapsing entirely on the coming Black Friday"

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