An important classification on how market moves is critical to understand the markets
Short Term - Short term volatility of market is due to EVENTS. A war, or famine or some disruption causes the market to dip. Maybe it the right time to buy as things will get to normal later.
Mid Term - Mid-term volatility of market is due to LIQUIDITY. A hike in int. rates, CRR etc. makes the liquidity suck out of market or infuses funds. Selective buying of stocks affected by this may be a good buy.
Long Term - Long term is defined by VALUATION. If long term investment is to be done valuation is critical to see if the purchase price justifies its valuation. These generally go through up and downs over a period of time and requires non emotional investing of not getting scared and dumping the share when it dips more than you thought it would.
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