Last Friday, the
24th June 2016, which the media christened “The Black Friday”, when
the global financial markets roiled, and lost over $2 trillion in value, Foreign
Institutional Investors (FIIs) sold shares valued Rs.629 crore ($92 million),
and retail investors purchased stocks worth Rs.118 crore ($17.50 million),
which raises the important question, who really
is and should be Afraid of Brexit?
It is not
suggested here that global fears regarding Brexit are a Hoax, but merely that
the jitters are exaggerated, and purely temporary. We must realize that all the 28 member
nations of the European Union were independent, sovereign states in the first
place, before they voluntarily came together to form the common market. So the sky is not really falling nor is it
going to in future.
What remains to
be understood is who is scared, who is not; who should be and who need not.
FIIs who pumped
dollar funds into the Indian stock markets over the years, and jacked up the
valuations to unreasonable levels, panicked and sold. They also sold fearing irrational redemption
by their investors back home.
Value investors
and even lay investors who invest in mutual funds and Systematic Investment
Plans (SIPs) need not be and should not be Afraid of Brexit, and simply sit
tight through the present turmoil, Nay aggressively purchase and accumulate
shares of those excellent companies, which were pricy and unaffordable earlier. In fact, right now, it is the Golden Opportunity to Master one’s temperament, and to Exorcise the Emotional Ghost called “Fear”.