Anil Singhvi Decodes Bull Market, Says Don’t Worry, US Market Fall Caused By Profit Reserve


Zee Business editor-in-chief Anil Singhvi said he was not afraid of the fall in the US market. The market guru said to be careful and not to run away. Anil Singhvi said he sees this as a reservation of profits. He added that bull markets can sometimes see corrections of 3-5%.

Anil Singhvi said attendees shouldn’t decide whether the news is good or bad by just looking at Dow Jones. The market and the news are two different things to watch individually. Singhvi points out that bull markets mostly start with low interest rates when money starts coming in and a bull market starts. After that, the fundamentals start to slowly improve and the bull market continues as the numbers reflect the strong fundamentals. After that, there is confirmation of the bull market.

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Singhvi pointed out that US markets started to do well when interest rates were close to zero sentiment was negative due to the corona situation. The US economy started to do well from February to March 2020. Money started to flow into the US economy during this time, followed by strong fundamentals and ultimately led to economic recovery. The bull market ends when interest rates are at their peak, inflation is at their peak, and there are liquidity issues in the system.

Singhvi said that interest rates play an extremely important role in moving the bull market from the bottom to the top. At lower interest rates the market goes up and the Bulls gain the upper hand while at higher interest rates the markets fall and the Bears gain the upper hand.

The market decline yesterday was due to the indication for the first time of an interest rate hike.

Singhvi said that if interest rates and inflation are low, growth will also be low, while when interest rates rise and inflation is high, growth will be visible in the economy. Market participants should try to understand the behavior of the market over the long term rather than minute by minute.

Singhvi pointed out that there is a strong flow of liquidity in the US markets and money is parked in all asset classes such as stocks, metals and Bitcoin. Market participants should view yesterday’s drop in US markets as a reservation of profits by participants. A decline of 3% to 5% is normal in bull markets. Investors need to be prepared for this type of correction and it is extremely difficult to predict this type of correction in the bull market. The markets will form a solid foundation and the bull market will continue from there, Singhvi says.

Singhvi said market participants should be cautious and cautious, but not exit the markets and disappear. He said there is a possibility that this decline could continue as it may be an ongoing correction in a bull market. Market participants should not panic and worry about the fall in US markets yesterday. Hedging would be an appropriate strategy to protect against the bull market downside, Singhvi says.

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