Start buying slowly and hike investments if the dividend yield goes up further.
While the country has gone into a lockdown to halt the march of the Covid-19 virus, the stock market crash triggered by the global panic may be good news for long-term investors. Valuations have crashed and could fall even further over recession fears. ET Wealth tells investors what they should do in these circumstances.
There might be a silver lining to this once-in-a-decade kind of crash Despite short-term pains, the crash is a good accumulation opportunity for long-term investors. Previous crashes have wiped out more than 50% of the Sensex value. Sensex PE is below long term average With Sensex PE close to 10-year lows, start buying in staggered manner. Warning: Trailing PE have touched lower levels in previous bear markets over fears of fall in future earnings.
Dividend yield is a good valuation tool Dividend yield is at reasonable levels, another nudge to start buying. It makes sense to buy cheap Since we are already in fair valuation zone, investors can start buying. 10-year Sensex CAGR is at 15-year low A very low 10-year CAGR indicates that investors can start buying slowly. Sensex dividend yield is close to 10-year high Start buying slowly and hike investments if the dividend yield goes up further. Warning: Companies may cut dividends in coming year and dividend yield may fall again in future
Historical low returns can be good news Historical 10-year CAGR turned negative only once in 2002-03. Any fall from current levels should be used to buy more as it may mean good future returns.
Ahead of Market: 10 things that will decide stock market action on Wednesday2026-06-23T15:02:11Z
