Market falls trigger different behaviour among investors

The committed long investors will make money 2 or 3 years down the road as they reduce their acquisition prices

The Nifty has dropped over 1,300 points from its peak, a retraction of 11 per cent. Smaller stocks are down even more. Importantly, all the major stock indices, the Nifty, Sensex, Nifty Next 50, Nifty 500, and the Midcaps, Smallcaps, etc, have broken down below their respective 200-day moving averages. This indicates a broad bear market which reflects bearish sentiments across most investor classes. Sector-specific indices are also down to bear market territory.

This is the kind of move that triggers different kinds of behaviour in different investor classes. The vast majority of retail investors are traders by nature. They are