Opportunity in volatility

From Mahurat trading on October 17th till today our markets have fallen from Nifty Levels 5180 to 4560, recovered to 5000 and fallen again to 4950. Extreme volatility and very fickle sentiments are making life difficult for both traders and investors. While this choppiness is likely to continue for some more time we believe that the underlying strength of our bourses will ride over all other concerns in the medium to long term. This volatility is giving investors an opportunity to invest in panics and get a good entry level for riding on India’s growth story. Traders can too make a lot of money by simply riding on the momentum and following the trend in either direction. Though this is easier said than done but one must keep in mind that if negotiated properly high volatility will always generate higher returns both for a short term trader and a long term investor. Patience and courage are two virtues necessary for prospering in these volatile times. When the sentiment is negative the speed of fall is likely to make buying very difficult. You will need immense courage to go against the gloomy predictions which will surround us on all sides on these frightful days and press the buy button. Also you will need to have strong conviction in the growth story of our country overriding all other apprehensions. On the other hand when the going is good, extremely positive noises will be heard everywhere. On those days you will need loads of fortitude to defer buying your favourite stocks. ‘Be greedy when others are fearful and fearful when others are greedy’ is more than ever before, the mantra for becoming wealthy in the present volatile times.