When the dust finally settles and it always does, India will end up as a major gainer from the Crisis. #coronavirusus
Of course, that doesn't mean that one needs to go out and Buy today or tomorrow unless one has a plan he is just executing. This is more on the longer term (5 years and above)
Compared to say US, stocks (other than a few front-line / quality) have already been closer to their long term average valuations.
Based on historical trends, I don't expect markets to fall and sustain more than 20% from current levels. That would be around 9K for Nifty 50
A 20% fall in Nifty should translate to 30% to 40% fall in Mid and Small Caps. To me, at the current stage this is the worst case hypothesis.
My current Equity:Debt Ratio is at 55 : 45. I am willing to go for a max of 80 : 20. Plan hence is to move bit by bit from Debt to Equity as the market recedes.
Given the fact that we are more than 2 years into a proper correction, I feel that there aren't too much of speculative positions that need to be unwound
This means that big falls will be more due to lack of Volume than unwinding of margin positions. Those generally spring back as fast once the sells are completed.
I could be completely wrong and markets could do down 40% from here, but I am planning for a normal correction and not a Great Depression.
Only way to stay sane in markets is to have a plan and try to stick with it. You cannot really do anything with regard to things you don't have control on anyways. #EOT
