Synopsis
When we buy a stock, we are buying a piece of a business. And more than the absolute price of the stock, it is the business which needs to be looked at. Now, a business is a sum of several things, all of which need to be carefully considered. First: Its overall market size. Second: Whether the management has been able to grow the business and share wealth with the minority shareholders. Third: The quality of the balance sheet, so that, in case of any slowdown, the company is able to turn it into opportunity. If things are fine on these parameters, then even the timing of your buy decision does not matter.
For all those who worry when markets are volatile and keep looking at the Sensex and Nifty, here’s a better way to channel your anxiety. Start looking at how a sector functions, and whether the factors impacting the sector are getting better or worse. Just to put this in perspective: Have healthcare companies seen any decline in business in the last six months, when the markets were bearish? The answer is no. So, should you sell healthcare
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