If you are an equity investor, chances are that you have seen more reds than greens in your portfolio recently. To put things in perspective, if you invested in a Fixed Deposit (FD) instead of the S&P BSE Sensex at the start of the year, you would have made more money. At the time of writing, Sensex was up only 2.7 percent year-to-date (YTD) while the BSE Midcap and BSE SmallCap indices were down 20 percent and 27 percent respectively. Autos, Industrials and Telecom are some of the worst hit sectors. What’s going on?
Some say it’s a justified correction for irrational exuberance in the past while others blame it on unfavorable macroeconomic developments. You take your pick. But times like these are more-than-a-gentle reminder of the risks involved. During such periods, there is one thing that you hear a lot – “Stock Market is very volatile”.