Those fresh/new people who entered the market last year during the fall/crash have not seen any major downtrend but only uptrend that too like 100% 200% returns. How they would be affected in the long run?
I believe no one knows exact answer for it, it is more of subjective and can depend on many other factors and can vary from individual to individual.
Why are ‘you’ bothered about what ‘they’ would do?
They may be smart people who would either make profits in a situation when markets take a U-turn or, life would teach them a lesson. Nobody knows.
But, why does it matter to you in the first place?
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few could have booked part profits so that their average would be lower and left the remaining quantity for the long term. The profits earned would have been invested back into newer stocks at the current levels as FD rates are lower.
As siva has mentioned, nobody will know as each individual is different and his need and requirements are different.
I believe the investors who bought in when stock prices were falling are strong believers of the companies they own.
These are my personal views.
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Dude those days are gone when we consider retailers stupid, or wait for euphoric dumb investors to finally face the music.
Remember even Nithin Kamath, owner of Zerodha, openly accepted that he made a mistake of taking the rally lightly because only retailers were buying.
Maybe the rally has only started, and you would have to wait for years for a proper downtrend, most retailers even if they call themselves long term investor, once they see 100-200% gains they will run away, so they might not even be there when this crashes.
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With so much information available on Risk and reward , and about the market , i think people at large are getting smart ,we can see that even after FII’s selling hugely in last 6 months our market is steady and even if its falls 5-10% which happend twice in last 6 months , DII and Retailers have dominated and made FIIs irrelevant. I think FII’s in few years may get irrelevant ( only in deciding the trend of the market) , previously years they have dominated nad made the trends.similar thing happened in Japan where Retailer are dominating the market . But with interest rates failling and huge retail participation it has made the market stable. These are only early signs we will see in few years.
Also SEBI and RBI are really doing great job in stabilizing , bringing transparency in the market . Mass hard working population are getting exposure, inspiration and knowledge about the international developed economies , if progress remains on track we could have started(ing) of great bull run similar thing happened in US in 80’s-90s and china in 2000 . Off-course every countries journey is different and timelines cannot be predicted.
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