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How to invest when everyone is fearful
Why This Blog Matters
Markets run on greed and fear. During greed, investors overpay. During fear, investors sell great businesses at discounts. Smart investors flip the script: buy when others are fearful.
How Should Retail Investors Invest During Fear?
1. Don’t Stop SIPs
- Fear-driven dips = lower NAVs.
- SIPs automatically average costs.
2. Build a Watchlist
- Make a list of 10–15 “dream stocks.”
- Buy when they’re available at 20–30% discount.
3. Use Crash Funds
- Keep 10–15% cash/debt ready.
- Deploy in staggered lumpsums when indices drop >10–15%.
4. Ignore Noise
- The media amplifies panic.
- Focus on fundamentals, not headlines.
Case Study: COVID Crash 2020
- Sensex fell ~38% in 2 months.
- SIP investors + dip buyers saw portfolios double by 2021.
- Panic sellers locked in permanent losses.
Fear created fortunes for the disciplined.
Take the Charge: Do This
- Continue SIPs, no matter the headlines.
- Create a “crash watchlist” of quality stocks.
- Use 10–15% of the portfolio as dry powder for dips.
- Review risk exposure- rebalance if overleveraged.
FAQs
1. Should retail investors stop SIPs during a market crash?
No. SIPs average costs and benefit from fear-driven dips.
2. How do smart investors invest when markets are fearful?
They continue SIPs, use crash funds, and buy quality stocks at discounts.
3. What is the best strategy to invest during fear-driven selloffs?
Keep a watchlist, deploy funds in phases, and ignore media panic.
Final Takeaway
Fear isn’t a reason to run — it’s your buying opportunity.
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