The stock market is always a hot topic of discussion, especially around election time. With the results of the upcoming election on 4th June looming, many people are feeling anxious about what will happen in the stock market. Some are even reaching out to experts on social media platforms like Instagram for advice.
The Home Minister, Mr. Amit Shah, has made a bold statement urging people to buy into the stock market before 4th June, as he believes that the market will shoot up after the election results. His confidence stems from the belief that the BJP government will come back into power.
But why do election results matter for the stock market? The answer lies in the fact that the government in power makes crucial decisions that impact businesses, such as budget allocations, economic policies, and implementation of schemes. These decisions can directly affect the profitability of businesses, which in turn influences stock prices.
Looking back at past election results, we can see a pattern in the stock market’s reaction. When the government changed hands in 2004, the market experienced a significant drop initially but eventually recovered. In contrast, when the same government retained power in 2009, the market saw a substantial increase.
As we approach the upcoming election, there are three possible scenarios to consider. If the BJP government secures a majority, the market is expected to rally, especially in sectors like infrastructure, railway, banking, and defense. However, if a coalition government is formed, short-term selling may occur, but long-term performance could mirror the BJP’s policies.
On the other hand, if Congress or the India Alliance comes to power, the market may experience a sharp decline due to uncertainty and potential policy changes. Sectors favored by the BJP government, such as PSU, infrastructure, and banking, could be most affected in this scenario.
Ultimately, the decision to buy, sell, or hold onto your portfolio depends on your risk tolerance and investment strategy. If you have a long-term vision and believe in the current government’s policies, staying put may be the best option. However, if you prefer to play it safe, selling before the election and buying back later could be a strategy to consider.
Regardless of the outcome, it’s essential to stay informed and prepared for the market’s volatility during this time. Whether you choose to take action or ride out the storm, keeping a close eye on market trends and being ready to adapt to changing conditions will be key to navigating the post-election landscape.
