It was certainly a Breaking news World over when Standards and Poor (S&P) downgraded the Credit Rating of US from AAA to AA+. First ever since 1917, but yes that's a hard fact. US economy is seeing a downward trend for all the reasons of Lack of Adequate Governance Mechanism and for the reason that can be well expressed as -
"In an economy if a few people make a few work for few who think its there birth right to not work, it kicks the downturn. But, if the people who work think that when they work, the benefits pass on to the others who either make them work or don't work and then they stop working, the economy would certainly take a good plunge to hit the dirt."
Now, its an interesting factor to see an economy crumple and equally interesting is to see the effect on the other economies, specifically the growing economies. India being one of those where it is certain to see the negative impact, but it would be equally interesting in case of India to see the way the Indian economy would cash in the opportunity.
Wait there before you make an opinion that I might be talking absurd and weird please mark my words that the Indian Economy is one of the most strong economy to glide through the worst economic crisis that might hit the world. It is an economy which is one of the most self reliant economies. Though it might get hit by the patch of downturn world over, but it certainly has the ability to re-bounce from the slack and hit the pace again.
The Indian Stock Market would also react negative for the plunge in stock Markets world over and there would be a selling pressure in the market. But the investors should NOT PANIC at the selling Pressure from the Institutional Investors or the FIIs. The selling pressure certainly would create a void, but that void would be temporary and as the Indian Economy would re-bounce, the markets would look upwards....just a matter of few weeks. From where I see the Market, it would not be say another 4 weeks that the market would see an upward swing.
I am going to be holding on to my portfolio with a tight grip on the stocks I own and would suggest the same to the friends and family. It is certainly an acid test, where we are not supposed to panic and give in to the selling pressure. Its rather time to Hold and Wait......