Stock market today: Sensex, Nifty 50 fall about 1% each; what should be the investment strategy in a volatile market?

livemint.com:

World markets today: US stocks sink after inflation data dampens rate cut hopes; Dow, S&P 500, Nasdaq dip over 1% "Investors can look to exit the stocks (fully or partly) from their portfolio: (i) where they did not have conviction, but bought based on external recommendation, (ii) where they have made good profits on stocks which were bought based on their study and conviction, (iii) where the weight of the stock in their portfolio has risen too much and by rebalancing they can bring their weight to appropriate levels," said Deepak Jasani, Head of Retail Research, HDFC Securities. Shrey Jain, Founder and CEO of SAS Online suggests traders worried about their portfolios need to dump high beta stocks.

Jain said utilizing technical analysis indicators such as moving averages, relative strength index (RSI), and trendline analysis can help identify stocks showing signs of weakness and inform decisions to exit positions to protect capital. Traders must respect stop loss and avoid aggressive long positions for the time being.

"A correction in the stock markets highlights stocks with weak fundamentals or stocks that have run up beyond their fundamentals. Penny stocks with no fundamentals need to be dumped first.

Shares of new-age companies which are not making profits can be got rid of," said Jain. Also Read: Jefferies initiates ‘buy’ call on Adani Enterprises with ₹3,800 target price Nikunj Saraf, Vice President at Choice Wealth underscored that companies saddled with excessive debt often suffer the most in market downturns.

"Research shows that firms with debt-to-equity ratios above two are at higher risk of significant underperformance during economic contractions," said Saraf. Saraf added that historical data reveals that