Will Stock market bubble burst or enlarge? Are we really in Stock market bubble?
1. What is Stock Market Bubble ?
Unjustifiable High Prices of the shares is a bubble as a result of bullish sentiment in the market.
2. Can bubble be Measured ?
Bubble can be measured by comparing traditional or historical prices movements with high prices resulting from bullish sentiments.
3. Is India facing a Bubble at present ?
The RBI in its annual report for 20-21 has made the investors cautious of possibility of bubble in the Indian stock market
4.Should I be worried about the future crash possibilities?
UPS and DOWNs is the inherent nature of Stock Market. Yes we should be cautious and should be prepared for 15-20 % correction the stock market at any point of time. But simultaneously there is nothing to worry about stock market crash due to below reasons
POSITIVES OF STOCK MARKET CRASHES
♦ Market crashes are Inescapable.
♦ Market crash creates a good entry position into stock market.
♦ It lowers the Prices of Good Companies and make them worth buying.
♦ With continuous buying in Crash Market, The Recoveries from the Crash Market Happens very rapidly.
♦ If invested strategically, Money could multiply fourfold.
5. How can Investor play safe under the Bubble Possibilities :-Techniques to be followed is highlighted below
♦ Monitor closely and deeply the price movement of particular shares on daily basis
♦ Concentrate on particular share specific activity.
♦ Identify the bubble as they emerge and not after they exploded
♦ Invest and Analyze in Quality Stocks with justifiable PE Ratio.
♦ Invest in Good Business Management and avoid small caps being high risky.
6. Will the market bubble burst?
Nobody can predict whether the stock market bubble will soon burst, but the better news is that it’s almost guaranteed to recover. By buying quality stocks and staying invested for the long period, your portfolio will be able to survive whatever the market throws at it.
We have witnessed Indian Stock Market Long Run Bullish Trends and Amplitude of Potential Growth of Indian economy over last few decades. The future India is on the wheels of Growth and has tremendous potential to outperform identification of this current time and investing in right companies will play a crucial role for earning opportunities lying ahead.
Disclaimer: The above article is just for information and knowledge sharing and does not in any way advice to invest in share market. Do contact your professional advisor before investing in share market as share market is subject to market risk.
Jatin Rathor & Associates is a team of Chartered Accountant (CA), Financial & Investment Consultants, Tax advisors & Accounts Executives and global business service provider located at vishrantwadi, pune. Our aim is to reduce the customers pain. Our team represents a coalition of specialized skills and expertise geared to offer sound financial & tax advice