Editors Take: Anil Singhvi suggests mid and small cap investors not to exit after one-day recovery

In a special edition of Editor’s Take, Zee Business Managing Editor and Market Guru Anil Singhvi suggested investors not to exit from the mid and small-cap stocks after a one-day recovery. He said that the shocks of correction will persist but broader market stocks would consolidate and rise again.

The market guru, however, also recommended investors loosen up some excess positions. He reiterated that the one-day surge in mid and small-cap indices will not recover the losses substantially and one must continue holding these stocks for future gains.

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The market’s volatility is not in our hands, said Singhvi, adding further that what’s in our (investors) control is risk management. And, hence it becomes important to trade cautiously and with a stop-loss.

He says, the market doesn’t function in a way that the heavyweights will fall first and then broader markets, rather the declining or gaining pattern is unpredictable. The mid-cap index saw a bull run first than benchmarks and other broader markets, and perhaps, it showed the decline first, Singhvi added.

The managing editor suggested that profit must be booked only if the investors find a 15-20 per cent surge in the stock from the levels at which positions were entered.

He said, there was no need to rush for the mid-cap shares that are trading at higher levels and yet to show a bull run. The managing editor pointed out that the market can’t surge every day, and there would definitely be a day wherein it posts a correction, challenging investors’ confidence.

The problem with every trader is, they want to sell at the top price and buy at the bottom price.