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The Rediff Interview/Sashi Krishnan, CEO, DBS Chola MF
'Best time to invest in market is when there is blood on the streets'
May 23, 2006
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.
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?
Everyone talks about the fundamentals of the Indian economy being strong, then why this historic market meltdown?
Fundamentals of the Indian economy have not changed at all. We still maintain 8 per cent GDP growth and I do believe that corporate earning would rise 20 to 25 per cent. This historic meltdown will have no effect on the economy as such.
I don't agree. There is no reason why a small investor cannot be a long-tertm investor. Investors, especially retail investors, should not get worried. They must know that volatility is the only certainty about this market.
Do you believe that the Indian stock markets are regulated well enough to protect the small investor?
I do think India has an extremely well-regulated market. Whether the market is rising or falling, the regulator has always been at the top of everything. Short-term volatility is the only reality. It will ease out in the long term.
Market gurus like Marc Faber and Hemen Kothari say that India is in a 10-year Bull Run phase. Do you agree? Why?
Speaking of economic growth, I do feel India is going to grow very fast. Domestic demand in the economy is very strong. It translates into healthy earning for corporates which in turn ensures that the market will remain 'good'.
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?
The small investors should never try to time the market. They must get into the market whenever they have money, even now.
Should small investors just sell off their stocks and run from the market? Or should they depend more on mutual funds for investment?
What stocks or sectors should retail investors look at now?
Retail investors must focus on stocks whose valuation have not moved up so much: technology, banking, textiles. They must look at value investing rather than momentum investing.
What according to you are the 5 mistakes to avoid for small investors, especially during such volatile times?
What according to you are the 5 basic norms of smart investing?
Remember, best time to invest in market is when there is blood on the streets.