With reference to “Inevitable correction” (February 13), the stock market was on the boil and this ride had to come to an end. It was mainly due to negative global cues as well as the recent Budget, which was obviously populist in nature considering it was the last budget before the next general election. Though news from the US, where economy is expanding fast and generating decent jobs, should please locals there, its negative impact was felt 9,000 miles away in India.
As rightly mentioned in the editorial, in the last two years participation of retail investors in the market has increased manifold, both directly or through mutual funds, which is a positive sign as domestic savings have shifted towards financial assets. But as we had seen during the 2008 market crash, when retail investors left the market in hordes as they panicked, it should not happen now as despite demonetisation of cash and the goods and services tax which hampered growth of many companies, the India story has remained intact. And yes, the third quarter results have shown a glimpse of revival and the coming quarters will surely throw up more positive numbers. There is no dearth of awareness and education for retail investors when it comes to staying invested for long to reap the actual benefits of the market. Still, human behaviour does play a critical role here and fear among the investors is bound to occur. But they would do well to stay invested and continue to show mature behaviour. Only then will they get the benefits of average costing, which will come down after this correction.
Bal Govind, Noida
Letters can be mailed, faxed or e-mailed to:
The Editor, Business Standard
Nehru House, 4 Bahadur Shah Zafar Marg
New Delhi 110 002
Fax: (011) 23720201 • E-mail: letters@bsmail.in
All letters must have a postal address and telephone number
To read the full story, Subscribe Now at just Rs 249 a month