What goes up must come down, warned market experts when Sensex was touching record heights a few weeks back.

Therefore, when markets started sliding recently, it should not have come as a surprise. Yet marketmen seem to be dumb-founded by what they term as a 'cataclysmic fall'.

The government along with the finance ministry have pulled up their socks in their bid to explore the reasons.

In an to attempt to seek an answer, rediff.com spoke to market analysts, traders and head honchos of business. In the next few days, we will bring you a series of interviews which apart from focusing on the issue will also provide guidelines to investors.

Excerpts of an interview with Janish Shah, Head-Research,  Networth Stockbroking Ltd:

For the past few days the markets have been dropping like never before. Do you think this is a 'correction' or is there more to it than that?

It seems to be a correction only since the valuations have come down to more realistic and attractive levels.

Everyone talks about the fundamentals of the Indian economy being strong, then why this historic market meltdown?

Too much of optimism, strong liquidity flow and re-rating ahead of time made market highly sensitive to negative news. Thus with a little worry on interest rate front in global markets triggered sharp fall.

It appears as if the Indian stock market is safe only for foreign institutional investors or big domestic funds, while the small investor is being slaughtered. What is your opinion on this?

I think the market is for all. Leverage always carries its consequences. On longer terms, the investors can expect decent returns.

Do you believe the Indian stock markets are regulated well enough to protect the small investor?

Yes, I think so.

Market gurus like Marc Faber and Hemen Kothari say that India is in a 10-year bull-run phase. Do you agree? Why?

I agree because the economic cycle has turned up and the benefits of consistent growth above 7 per cent is expected to create strong consumption demand for the next few years.

Where should the small investor invest now? Seeing that the stock market is rising to new heights one day and falling like never before the next, should he enter the market at all?

Apart from last week's volatility, the investors should follow the downward movements to enter the market.

Should small investors just sell off their stocks and run from the market? Or should they depend more on mutual funds for investment?

It will vary from person to person depending on one's risk appetite.

What stocks or sectors should retail investors look at now?

One must focus on sectors like fast moving consumer goods, pharma, cement, construction and textiles.

What according to you are the 5 mistakes to avoid for small investors, especially during such volatile times?

• Possessing 'stop herd' mentality (blind inclination to follow the momentum)
• Being greedy
• Not inculcating research habit
• Narrowing long investment horizon
• Not letting one's trading stock to stay permanent in the investment portfolio

10. What according to you are the 5 basic norms of smart investing?

• Getting rid of 'stop herd' mentality
• Not being too greedy so as to get rich quick
• Doing enough research
• Broadening long investment horizon
• Maintaining a steady portfolio 

As told to Indrani Roy Mitra