FINANCIAL CHRONICLE™
Dear Reader,

Registration with the Sri Lanka FINANCIAL CHRONICLE™️ would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
FINANCIAL CHRONICLE™️
www.srilankachronicle.com


Join the forum, it's quick and easy

FINANCIAL CHRONICLE™
Dear Reader,

Registration with the Sri Lanka FINANCIAL CHRONICLE™️ would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
FINANCIAL CHRONICLE™️
www.srilankachronicle.com
FINANCIAL CHRONICLE™
Would you like to react to this message? Create an account in a few clicks or log in to continue.

Encyclopedia of Latest news, reviews, discussions and analysis of stock market and investment opportunities in Sri Lanka


Submit PostSubmit Post
ශ්‍රී ලංකා මූල්‍ය වංශකථාව - සිංහල
Submit Post



Latest topics

» GLAS will be winner with Super Gain.
by ronstyn53 Yesterday at 10:22 pm

» CIC HOLDINGS PLC (CIC.N0000)
by abey Yesterday at 9:07 pm

» ROYAL CERAMICS PLC (RCL.N0000)
by abey Yesterday at 8:59 pm

» First capital holdings CFVF.N0000
by invest thinker Yesterday at 4:46 pm

» LANKEM DEVELOPMENTS PLC (LDEV.N0000)
by Wolf86 Yesterday at 2:00 pm

» ???? අප්‍රේල් 16 ???? මේ දින 3 කෙටි සතියත් කොළපාටින් අවසන් වුනා
by dayandacool Yesterday at 1:58 pm

» Lanka Walltile PLC Investment Case
by judecroos Yesterday at 8:55 am

» Which is the best at current market condition ? ( At least 30% within 30 Days)
by judecroos Yesterday at 8:39 am

» Daily Foreign Transactions
by Pradeep90 Fri Apr 16, 2021 8:03 pm

» Big opportunity in Kegalle Plantations
by EquityChamp Fri Apr 16, 2021 2:58 pm

» RAIGAM WAYAMBA SALTERNS PLC (RWSL.N0000)
by stockchaser Fri Apr 16, 2021 2:42 pm

» විජේදාසගේ... voice cut ප්‍රතිඵල
by nigma Fri Apr 16, 2021 11:59 am

» If you buy a stock that’s not going up in price, you won’t make any money. STOCK market for beginners
by dayandacool Fri Apr 16, 2021 11:31 am

» B P P L HOLDINGS PLC (BPPL.N0000)
by vikiperera Fri Apr 16, 2021 11:17 am

» VPEL VPEL VPEL
by invest thinker Fri Apr 16, 2021 10:23 am

» Thoughts on SINS
by Swissinvest Fri Apr 16, 2021 10:04 am

» VFIN / VPEL / PABC - Share SPLIT or VTWO ?
by WealthKing Fri Apr 16, 2021 8:33 am

» DIPD/HAYC/HAYL
by Harry82 Fri Apr 16, 2021 5:46 am

» LANKA ALUMINIUM INDUSTRIES PLC (LALU.N0000)
by Jana Thu Apr 15, 2021 11:15 pm

» EXPOLANKA HOLDINGS PLC (EXPO.N0000)
by learningthemarket Thu Apr 15, 2021 8:18 pm

EXPERT CHRONICLE™

ECONOMIC CHRONICLE

GROSS DOMESTIC PRODUCT (GDP)


CHRONICLE™ YouTube

CHRONICLE™ NEWS PRODUCTS

FINANCIAL CHRONICLE™

Views & Reviews, Analysis, Evaluations, Discussions, Gossip and Hot Tips relating to Sri Lankan companies listed on the Colombo Stock Exchange (CSE)
Contribute




DAILY CHRONICLE™

Latest news and articles published in Newspapers, Websites, Blogs and other online news sites relating to business and investments in Sri Lanka
Contribute



ECONOMIC CHRONICLE™

This is a section that provide news, views, analysis, predications relating to Political and Socio-Economic factors and how such activities affect the Stock Market and other economic activity of the Country.

Contribute




EXPERT CHRONICLE™

This is an exclusive section for Expert Articles which will help member to share knowledge through comments and responses of the members. All members are allowed to reply and make comments to these articles.

Contribute


Submit Post


CHRONICLE™ YouTube

Youtube Videos and other visual presentations relating Stock market and other investment advise submitted by members or other contributors.

Contribute


Submit Post


කොළඔ කොටස් වෙළඳපොළේ වංශකථාව
කොළඔ කොටස් වෙළඳපොළේ ලැයිස්තුගත සමාගම් කොටස් ගැන තොරතුරු¸විශ්ලේෂණ¸සාකච්ඡා¸ කටකතා¸රසකතා යන සියල්ල අපේම සිංහලෙන් කතා කළ හැකි ‘කතා මණ්ඩපය’

Contribute

Twitter Feeds
POPULAR COMPANIES
A

ABANS ELECTRICALS PLC

ACCESS ENGINEERING PLC Hot

ACL CABLES PLC

ACL PLASTICS PLC

ACME PRINTING & PACKAGING PLC

AGSTAR PLC

AITKEN SPENCE HOTEL HOLDINGS PLC

AITKEN SPENCE PLC

ANILANA HOTELS AND PROPERTIES PLC

ARPICO INSURANCE PLC

ASIA ASSET FINANCE PLC

ASIA CAPITAL PLC

B

BAIRAHA FARMS PLC

BALANGODA PLANTATIONS PLC

BIMPUTH FINANCE PLC

BLUE DIAMONDS JEWELLERY WORLDWIDE PLC

B P P L HOLDINGS PLC

BROWNS BEACH HOTELS PLC

BROWNS INVESTMENTS PLC

C

CARGO BOAT DEVELOPMENT COMPANY PLC

CENTRAL INDUSTRIES PLC

CEYLON COLD STORES PLC

CEYLON GRAIN ELEVATORS PLC Hot

CEYLON TEA BROKERS PLC

CEYLON TOBACCO COMPANY PLC

CHEVRON LUBRICANTS LANKA PLC

COLOMBO FORT LAND & BUILDING PLC

COMMERCIAL BANK OF CEYLON PLC

CITRUS LEISURE PLC Hot

COMMERCIAL CREDIT AND FINANCE PLC

D

DANKOTUWA PORCELAIN PLC

DFCC BANK PLC

DIALOG AXIATA PLC

DIALOG FINANCE PLC

DIPPED PRODUCTS PLC

DISTILLERIES COMPANY OF SRI LANKA PLC

DUNAMIS CAPITAL PLC

E

EAST WEST PROPERTIES PLC Hot

EASTERN MERCHANTS PLC

EXPOLANKA HOLDINGS PLC

E-CHANNELLING PLC

F

FIRST CAPITAL HOLDINGS PLC

G

GALADARI HOTELS (LANKA) PLC

GUARDIAN CAPITAL PARTNERS PLC

H

HATTON NATIONAL BANK PLC

HAYLEYS PLC

HAYLEYS FABRIC PLC

HAYLEYS FIBRE PLC Hot

HEMAS HOLDINGS PLC

HIKKADUWA BEACH RESORT PLC

HNB ASSURANCE PLC

HVA FOODS PLC

J

JANASHAKTHI INSURANCE COMPANY PLC

JOHN KEELLS HOLDINGS PLC Hot

JOHN KEELLS HOTELS PLC

L

LANKA ASHOK LEYLAND PLC

LANKA IOC PLC

LANKEM CEYLON PLC

LANKEM DEVELOPMENTS PLC

LAUGFS GAS PLC

LAUGFS POWER LIMITED

LOLC FINANCE PLC

LOLC HOLDINGS PLC

LUCKY LANKA MILK PROCESSING COMPANY PLC

M

MELSTACORP PLC

N

NATIONAL DEVELOPMENT BANK PLC

NATION LANKA FINANCE PLC

NESTLE LANKA PLC

O

ORIENT FINANCE PLC

OVERSEAS REALTY (CEYLON) PLC

P

PANASIAN POWER PLC

PEOPLE'S LEASING & FINANCE PLC

PIRAMAL GLASS CEYLON PLC

PRIME FINANCE PLC

R

RAIGAM WAYAMBA SALTERNS PLC

RENUKA AGRI FOODS PLC

RENUKA CAPITAL PLC

RENUKA HOLDINGS PLC

RICHARD PIERIS AND COMPANY PLC

RICHARD PIERIS EXPORTS PLC Hot

ROYAL CERAMICS PLC

S

SAMPATH BANK PLC

SEYLAN BANK PLC

SIERRA CABLES PLC

SINGHE HOSPITALS PLC Hot

SMB LEASING PLC

SOFTLOGIC HOLDINGS PLC

SOFTLOGIC LIFE INSURANCE PLC

SRI LANKA TELECOM PLC

SWISSTEK (CEYLON) PLC Hot

T

TEEJAY LANKA PLC

TESS AGRO PLC

THREE ACRE FARMS PLC

TOKYO CEMENT COMPANY (LANKA) PLC Hot

U

UNION BANK OF COLOMBO PLC

V

VALLIBEL FINANCE PLC

VALLIBEL ONE PLC Hot

VALLIBEL POWER ERATHNA PLC

W

WASKADUWA BEACH RESORT PLC


You are not connected. Please login or register

FINANCIAL CHRONICLE™ » FINANCIAL CHRONICLE™ » Very interesting article to read at this precise moment - 7 lessons to learn from a market downturn

Very interesting article to read at this precise moment - 7 lessons to learn from a market downturn

Go down  Message [Page 1 of 1]

sriranga

sriranga
Co-Admin
7 lessons to learn from a market downturn
You can never really understand investing until you weather a market downturn.
by Stephanie Powers,
14:44, Tuesday 23 August 2011
www.investopedia.com

The valuable lessons learned can help you through the bad times and can be applied to your portfolio when the economy recovers. Listed below are some common investor experiences during tough economic times and the lessons each investor can come away with after surviving the events.

Lesson 1 Evaluate your egg baskets:
If you're pulling your hair out because everything you invest in goes down, then the lesson you need is: Always keep a diversified portfolio, regardless of current market conditions.
If everything you own is moving in the same direction, at the same rate, your portfolio is probably not well diversified, and you could stand to reconsider your asset-allocation choices. The specific assets in your portfolio will depend on your objectives and risk-tolerance level, but you should always include multiple types of investments.
Taking a more conservative stance to preserve capital should mean changing the percentages of holdings from aggressive, risky stocks to more conservative holdings, not moving everything to a single investment type. For example, increasing bonds and decreasing stocks in small-companies maintains diversification, whereas liquidating everything and putting it in a cash account does not. Under normal market conditions, a diversified portfolio reduces big swings in performance over time.

Lesson 2: No such thing as a sure thing
If that stock you thought was a sure thing just tanked, then the lesson is: Sometimes the unpredictable happens. It happens to the best analysts, the best fund managers, the best advisers, and, it can happen to you.
The perfect chart interpretation, fundamental analysis, or tarot card reading won't predict every possible incident that can impact your investments.
• Use due diligence to mitigate risk as much as possible.
• Review quarterly and annual reports for clues on risks to the company's business as well as its responses to the risks.
• You can also glean industry weaknesses from current events and industry associations.
More often, an investment is impacted by a combination of events. Don't kick yourself over unpredictable or extraordinary events like supply-chain failures, mergers, lawsuits, product recalls, etc.

Lesson 3: Proper risk management
You thought an investment was risk-free, but it wasn't. The is lesson: Every investment has some type of risk.
You can attempt to measure the risk and try to offset it, but you must acknowledge that risk is inherent in each trade. Evaluate your willingness to take each risk.

Lesson 4: Liquidity matters
If you always stay fully invested, so you miss out on opportunities requiring accessible cash, then the lesson is: Having cash in an ISA (equity ISAs let you hold cash in them and money in cash ISAs can be transferred into shares while keeping hold of it's tax-free status) or spare money in your trading account lets you to take advantage of high-quality investments at fire sale prices. It also decreases overall portfolio risk.
Plan ahead to replenish cash accounts. For example, use the proceeds from a called bond to invest in the money market instead of purchasing a new bond. Sometimes cash can be obtained by reorganising debt or trimming discretionary spending. Set a specific percentage of your overall portfolio to hold in cash.

Lesson 5: Patience
If your account balance is lower than it was last quarter, so you overhaul your investment strategy before taking advantage of your current investments, then the lesson is: Sometimes it takes the market an extended period of time to bounce back.
Your overall portfolio balance on a given date is not as important as the direction it is trending and expected returns for the future. The key is preparedness for the impending market upturn based on an estimated lag time behind market indicators. Evaluate your strategy, but remember that sometimes patience is the solution.

Lesson 6: Be your own adviser
If the market news is getting bleaker every day and you're paralysed with fear, then the lesson is: Market news has to be interpreted relative to your situation.
Sometimes investors overreact, particularly with large or popular stocks, because bad news is replayed continuously by every news source going. Here are some steps you can follow to help you keep your head in the face of bad news:
• Pay attention and understand the news, then analyse the financials yourself.
• Determine if the information represents a significant downward financial trend, a major negative shift in a company's business, or just a temporary blip.
• Listen for cues the company may be downgrading its own expected returns. Find out if the downgrade is for one quarter, one year or if it is so abstract you can't tell.
• Conduct an industry analysis of the company's competitors.
After a thorough evaluation, you can decide if your portfolio needs a change.

Lesson 7: When to sell and when to hold
If the market indicators don't seem to have a silver lining, then the lesson is: Know when to sell existing positions and when to hold on.
Don't be afraid to cut your losses. If the current value of your portfolio is less than you paid and showing signs of dropping further, consider taking some losses now.
Selective selling can produce cash needed to buy investments with better earnings potential. On the other hand, maintain investments with solid financials that are experiencing price corrections based on expected price-earnings ratios. Make decisions on each investment, but don't forget to evaluate your overall asset allocation.

The bottom line
Downward stock market swings are inevitable. The better-prepared you are to deal with them, the better your portfolio will handle them. You may have already learned some of these lessons the hard way, but if not, take the time to learn from others' mistakes before they become yours.

http://sharemarket-srilanka.blogspot.co.uk/

Sstar

Sstar
Vice President - Equity Analytics
Vice President - Equity Analytics
Good Lessons Learnt!!
Now you can sell what you have collected?

stevenapple


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
thanks. Got it..
"Be your own adviser"

Sponsored content


Back to top  Message [Page 1 of 1]

Permissions in this forum:
You cannot reply to topics in this forum