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 attempt to seek an answer, Indrani Roy Mitra of 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 Sashi Krishnan, CEO, DBS Chola MF:

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 is very difficult to predict anything now. We need to remember, globally most markets have corrected themselves. Therefore, this fall is not isolated to the Indian market.

Interest rates in the US went up recently and metal prices came down across the globe. A lot of trade has been 'carry trade'.

So part of the fall can be attributed to the global factor. Domestic factors like taxation on capital gains has also unnerved many investors.

One must remember that valuations of stocks had gone much higher than the earning of stocks in the past few weeks and correction is a natural fall-out.

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. 

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 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?

Small investors must stay invested for a couple of years at least. There is no reason for them to sell off their stocks. Mutual funds, because of its diversified portfolio, seems to be the safest option for them.

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?

• Investing by fits and starts
• Dilly dallying with investment decisions
• Making wrong allocation of assets
• Getting swayed by short term volatility
• Getting overtaken by greed or making panic sales

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

• Invest regularly and systematically
• Start early
• Stay invested longer
• Asset allocate rightly (put larger portion into equity)
• Do not bother about short term volatility
• Get rid of greed and avoid panic selling

Remember, best time to invest in market is when there is blood on the streets.