Should you ride the fall or wait and watch? Here is what experts have to say

The Sensex and the Nifty ended the week down 2.5 percent.

The market turmoil of the last few days has left investors nervous and confused. Despite a rebound on October 27, the equity benchmarks Sensex and Nifty lost 2.5 percent during the week and are almost 6 percent down from their record highs.

Should investors ride the fall or should they wait? Here is what experts have to say to investors and traders in this challenging market:

Bounce is around the corner, don’t short 

Rohit Shrivastava, founder of India Charts, says traders should not short as a bounce is around the corner but after the pullback, it will be a sell-on-rise market largely. The Nifty was unlikely to be back above 20,000 this calendar year, he says.

Shrivastava says the rebound will be a "dead cat bounce" — a brief and temporary recovery after a significant drop. The recovery is brief and does not indicate a sustained reversal of the downward trend.

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Markets not factoring the full risk of West Asia conflict

Andrew Holland, CEO, Avendus Capital Public Markets Alternate Strategies LLPl says that the market has not taken into account possible conflicts in West Asia and when that happens, it can “also impact the market”.

With significant selloffs and global events, there is a chance of more weakness in the market, hence it is difficult to suggest investors buy the dip.

“I am more constructive around the 19,000 level but when sentiment has shifted so quickly, it is important to consider the remaining factors that the market must consider,” Holland says.

Also read: Nifty to hit 20,000 by March 2024 again, investors should take a deep breath: Andrew Holland

Look at safe sectors, wait for stability 

For investors, safety should be a priority, experts say. Unmesh Sharma, Executive Vice President, Head of Institutional Equities, HDFC Securities, safety will be in the largecaps as mid and small-caps may see corrections in the coming days. It is advisable that investors wait for the market to stabilise before taking any position.

Mihir Vora, chief investment officer, Trust Mutual Fund says that largecap valuations do offer some level of comfort, though he isn’t completely writing off small and mid-caps.

“Currently, the Nifty50 is more or less trading near the long-term average and that gives us comfort. Valuations have become frothy in the mid and small-cap space but I wouldn’t write off that segment entirely,” he says.

In short, don’t commit fresh capital to midcaps at this stage and be selective about the stocks you hold to ride the storm.

Be on the right side of the market story, shuffle the deck

Sunny Agrawal, Head of Fundamental Research – Equities, SBI Securities, says that investors need to be nimble right now and on the right side of the market story by constantly shuffling the portfolio.

For instance, Agrawal says, if you are heavy on global cyclical sector, maybe it is time to reduce the exposure and shift to the domestic consumption side. This is because risk emerging from global economies like the US or China could be bad for companies exposed to these markets.

As the market starts correcting, investors should start nibbling but only gradually increase the amount based on how the situation evolves. Again, stock exposure to global ups and downs should be avoided.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.