Stock Market Crash – Which Stock to Invest in Falling Market?

As Covid cases are at an all-time high in India, one should be worried about the stock market investment. The stock market crash can happen any time soon. What should you do if the stock market is falling big time? Do you sell and run out of the stock market? Or find the opportunity in the falling market? In this article, we will discuss the investment opportunity during the falling stock market.

Which Stocks to Invest in Stock Market Crash?

Invest only into quality stocks. This is the only thing you should do while the market is falling. Now you must be thinking what are these quality stocks? How to find them? Let me tell you finding quality stocks is not a big thing. look around you and you will find many quality stocks around you. Like the best bank in India, The best FMCG company is providing you day-to-day products like toothpaste, salt, soap, wheat, oil, etc. As you read these products, you will get an idea about the companies that are providing these products to the mass market in India. Check their market position and the demand for their products.

you will see that these stocks can never go out of date as they provide essential products to the Indian population.

Here is the list of such companies that should have in your portfolio even during the stock market crash.

StockPE RatioROCEEPS
HDFC Bank24.56.76%57.7
State Bank of India14.64.99%26
Britannia Industries Ltd46.937.4%77.9
Nestle India Ltd74.2139%224
P & G66.558.3%205
Avenue Supermarts Ltd18420.4%14.8
Pidilite Industries Ltd90.434.6%19.3
as on 25.04.2021

Stock Market Crash – What Should you Do?

Falling market is the real test of the investor’s patience ans skills. Here are the things you should do when the stock market is falling.

Hang on

I have read somewhere that the stock market is a roller coaster ride. So if you are already sitting in it and enjoying the ride, why to jump off the ride when it takes the u-turn? You are already filling the thrill and cannot do anything while the ride is on its pick.

The only thing you can do is to ‘Hang on’ the ride tightly and wait for the things to calm down. Same thing applies to the stock market ride. Once you are on to it, just enjoy the ride and wait for the right time to exit the market. Do not get panic by the ups and downs of the stock market.

You may lose your money if you exit the market in a panic situation. Time and again, I tell people to invest in good quality stocks only so that when the bear phase comes, the stocks can withhold the storm and your money invested is safe.

Do Proper Research

If you are one of those who want to make a fresh investment in the stock market during the falling market, then you should do a fundamental analysis of the stocks and then only invest in quality stocks. I would suggest you invest in the trenches while the market is falling.

Finding a quality stock is not a hard task. I have written a detailed article on how to shortlist stocks on your own. Shortlist the weatherproof stocks which can withhold any storm so that your money invested is safe. I remember, last year when the Corona Virus outbreak had happened and the stock market was falling down to the bottom. I had invested in HDFC Bank at the price of ₹. 830 per share. In the month of December 2020, I sold the stock at ₹ 1400.

If I had invested in any penny stocks, I was sure to lose my money in that stocks. So here the important thing is to do proper research and invest in only quality stocks.

Do Not Average Your Buying

When the stock market is falling, and your portfolio is bleeding, many people are thinking to buy more and more shares so as to average out the buying price. This is the worst mistake anyone can do thinking that the price at which he is buying is the bottom price. But the reality is that No. one knows the bottom price of the stock. So one should not do averaging in the portfolio stocks.

Wait for the right time to buy more quantity of the stock at the right time. Averaging at the falling market is like gambling in the stock market. The chances of losing your money is 10 times higher than the gain you are expecting. So one should not do averaging while the bear phase is going on.

Buying a stock just because you think that it is available at the cheaper rate than your buying is a big mistake.

Avoid the Noise

When the market is down, there are so called ‘market experts’ pops up on the social media and You tube. All of them suddenly started giving bearish trend of the market. If you closely check their profile, you will find that these are the people who had given a multibagger stock tips just a week before. Now suddenly what has changed in the market that he has 360 degrees view change.

If you want to be a successful investor in the market, you must avoid such stock tips freely available on social media. It is harmful to your mind and you could take a wrong decision on your trade based on such tips. It can impact your mental health and your emotions. In such a situation, the best thing you can do is to become deaf and avoid all the noise around you. the stock market has seen many ups and downs during its journey from 100 to 52000 points. This is normal, so take a deep breath and sit tight.

‘Any fool can know, the point is to understand.’

Albert Einstein

Conclusion

Ups and downs in the stock market crash are normal things. You should not get panic about the stock market going down if you have invested in the right stocks at the right time. Follow the above steps and sit tight, you will not lose your money in the stock market. There is no sure-shot formula for success in the stock market, but if you follow these steps, you will not go wrong in your stock market journey.

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