One thing the markets hate more than negative news, is… Uncertainty. As long as the negative news is known and measurable, the uncertainty around it declines and the markets can ‘price it in’. And more importantly, the market can then adjust to it and move on from there. But… Uncertainty is altogether different. The unknown leaves a vacuum that fear quickly fills. If things are not measurable, then markets have a hard time, as there are no probabilities, no timelines to work with, and more often than not, hesitant participants stuck analyzing endless worst-case scenarios. It is for this reason that markets often fall harder and faster during such uncertain periods than what the actual fundamentals warrant. And this is where opportunities start emerging, if you know what I mean (Remember Cash+Courage+Crisis?). And such opportunities don’t last for very long. Because when uncertainty declines, there is a reduction in unknown variables, and the markets recalibrate and start recovering quickly. Therefore, generally, a prudent strategy (after a decent correction) would be, to start deploying money gradually and in a staggered manner, without trying to wait for perfect clarity. Easier said than done, but that is what the right approach is anyway. Who said successful investing was easy? It’s simple. But not easy at all.
Disc. – This is not investment advice, please. You are smart enough and, so, always act in line with your risk appetite and investment horizons. And if in doubt, please talk to your investment advisor.