Equity Investing In Times Of Economic Stress
                     Equity Investing In 
Times Of Economic 
Stress
 Wealth creation is a long term process and online equity trading plays a critical role in it. This is 
simply because of the fact that equity has traditionally been one of the most preferred asset class 
chased by investors looking to build wealth over a long term. There are many stock brokers in India 
providing online trading in equities. However, there is a misconception that times of economic stress 
like the one we are in right now are not a good period for stock markets. This has turned out to be a 
misnomer as global as well local stock markets have soared sharply in recent months despite the 
growing menace of Covid-19. In fact, in India, this is even more aptly displayed as local stocks rose 
near six month high despite a sharp acceleration in daily cases in August and September. 
 The key point to remember is that these gains emerged even as India`s economy recorded a sharp 
contraction, with a surge in coronavirus infections weighing on the outlook for recovery. Gross 
domestic product shrank 23.9% in the three months to June from a year earlier.  However, the 
overall movement in local equity markets over last two decades shows that times of economic stress 
offer excellent opportunity. Here are a few insights about how to use such periods to your advantage 
and achieve long term success in share market investing. 
Importance of staying invested
  Do not stop investing in an economic downturn. In fact, your SIP holdings will fetch more units 
in a massive correction in equity markets. Similarly, buying blue chip counters at a cheap prices 
during deep equity market corrections turns out to be a rewarding strategy for long term 
investors. If needed, one can reduce the quantum of investment flows but stopping it altogether 
can affect your long term returns quite significantly.
Focus on quality stocks
 Quality, as they say is the key to identifying good companies which can weather all types of 
storms in the financial markets and emerge as the winning stocks over a period of time. Thus, 
these counters offer good capital protection when the markets are sliding and generate 
significant returns when indices turn higher. Look for companies providing a regular divided and 
recording strong performance on operating front. 
Looking for cycle beneficiaries
 Every down cycle offers opportunities to invest your funds in companies which are leading the 
market movement during the economic downturn. For instance, the current slide in equities has 
opened up excellent opportunities in Pharmaceutical and Information Technology sectors given 
that the structural undertone in these sectors has turned out to be extremely positive despite 
challenging economic outlook. 
Conclusion
 Remember that equity markets tend to discount the worst outcome whenever a massive 
economic challenge emerges on the horizon. The opposite is also true in the sense that markets 
tend to overshoot on early signs of economic recovery. Over the long term, markets tend to 
align themselves with corporate earnings, economic growth and overall changes shaping up the 
business environment in the country.  This also means that rather than worrying about the 
economic downturn, a savvy investor has to stay focused on his personal goals and ride out the 
difficult phases in stock markets to enjoy long term financial well-being. 
Thank You 
 Visit: https://www.ajmeraxchange.co.in/blogs/equity-investing-in-times-of-economic-stress