Every where you see negative stories moving around. You try to listen to people and then invest accordingly. This is a wrong type of move. People are talking about the US financial crisis which can lead to prolonged global recession. They are also making you aware of the economic slowdown in the US and Europe. This entire negative picture is brought in front of you, only to make you realize that the stock market is never going to recover. Is that true? Do you want to believe this situation? I am not asking you to run away from the true situation but nothing in this world remains on a permanent basis. Instead of listening to negative views, we must have a positive approach towards dealing with stocks.
Investors should slowly accumulate large cap stocks with attractive valuations. Investors can make use of an opportunity in the right way and should pick stocks purely on attractive valuations. This type of strategy can be applied if you are willing to have the patience to wait for at least one year. Those people who re sitting on cash and are looking for an opportunity to earn some money, should park their money in liquid funds or floating rate fund and should opt for systematic transfer plan or STP to invest in a well-diversified equity fund. They should choose a scheme after they have checked the performance of the concerned scheme of last three to five year period.
Do not follow the crowd. Just do the opposite. If everybody starts selling stocks, you try to develop courage whereby you can start buying stocks. You will get stocks at bargain rates, since you will find more sellers than buyers, in such a situation. What is more important is the price you pay when you acquire an asset. Here, I am giving you an opportunity to invest and not trade. Remember, when people’s negative reactions create fear in our mind, there is an opportunity being created in other stocks.