It's time to think and move on...

Ooops.... 800+ pts fall for the sensex; nearly 7% correction. Much needed correction - this is what the experts feel.

In any world, consolidation is the much more needed thing to move to next phase of growth. So what was happened today is mere consolidation movement in the stock market. This is the phase where overrated stocks come to the correct value level.

So what does it mean to the investor? Is this the stop call for the people started investing in equity?

First we need to take the lession from the market. If market consolidates and we are running out of the market then there is not point in investing and staying ahead in the maket. If we dont accept the change in the world (market) obviously we are out of the world (Market). So when the market consolidates we need to consolidate our portfolio. How to do this?

* If the fundamentally weak and speculative stocks were bought, get rid of those stocks with right stop loss level. (Probably, I will make the initiative of posting the stop loss level of the stocks i come across; It will be helpful for us for future reference - One more lession :))
* Buy the (new) right stocks at these lower rather correct level.
* If long term stocks were bought at relatively higher levels, rupee cost averaging (RCA) can be done by buying at this level.
* If the companies future guidance are good, these companies can be accumulated at these levels even if the positions already taken on these companies at lower level.

Like market consolidation takes the market to another level, portfolio consolidation will help in creating wealth over the long run.