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Lord Jesus Christ Says...

For what shall it profit a man, if he gain the whole world, and suffer the loss of his soul? Jesus Christ

19 Jun 2018

STOCK MARKET--Why is mid-cap stock falling?


                     Psychology.

Think about it. Markets work on future news right? Is there certainty in the future ? Indian government elections , rate hikes , global markets , macro factors such as Italy crisis.
Uncertainty causes doubt in investing. Now when you have a doubt in the future, no one is ready to take risk or the same exposure of risk which they were willing few months back.
If you see the nifty ,the nifty consist’s of good companies while mid and small caps consists of little more riskier companies comparatively.
Now if an investor faces uncertainty,they do not want to take more risk which means they will move towards less risky companies.
Hence the nifty is where it is because investors are comfortable with the risk however small and mid caps may see some uncertainty and risk averse behaviour for some more time. Hence the correction.
However quality companies will sustain both in small caps and midcaps both. It's the risky ones which may come down.
Markets work in cycles and psychology. This will happen 10 times in 10 years.
This is a good opportunity to enter quality stocks for the next cycle.


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