Time to buy quality stocks

On Friday, the stock market benchmark Sensex plunged more than 300 points at the opening bell, and by the afternoon session, the Sensex had lost more than 500 points. The markets were spooked on news of imposition of tariffs on steel and aluminium imported from China and the retaliatory tariffs proposed to be imposed by China on specific US goods, which signalled the start of a trade war between the two largest economies in the world. Nervous investors and traders simply offloaded their positions leading to a selling spree, which almost spelled a ‘Black Friday’ for the markets.

The point is that the crash in the market presented an opportunity for smart investors and traders to buy quality stocks at cheap valuations. Many would have capitalised on the opportunity and made a killing, but many more would have missed the opportunity, being carried away by the panic created by the negative news of the trade war.

It remains to be seen how the trade war pans out in the weeks and months to come, but one thing is sure: panic situations such as the one on Friday are a blessing in disguise for investors who are shrewd enough to seek opportunity in adversity. Investors and traders would do well to look out for such opportunities that may present themselves in future and profit from them. Remember the advice by the legendary investor Warren Buffet: ‘Be greedy when others are fearful and be fearful when others are greedy.’