Mid and small-cap stocks continued to take a beating on Monday, as many small investors are cashing out brokers said, for fear of further losses. This in turn has led to a vicious cycle, when every decline is prompting more investors to sell out.Reflecting this trend, the Nifty Midcap 100 index has fallen 7 percent in the past one week and Nifty Smallcap 100 is down 8 percent. This is in comparison to the 2 percent drop in Nifty50 and the 1 percent dip in Sensex during the past one week.Some of the immediate concerns bothering investors right now are inflation, poor earnings, excessive valuations in many pockets of the market and reports of a pick up in COVID cases globally, said Awanish Chandra, Head-Institutional Equities, SMIFS.Market participants say corrections like the one underway right now reduce excess positions in the market and is a positive.“In the past one week, several midcap and smallcap stocks have seen a 10-15 percent correction, and if you ask me if one should lap up beaten-down stocks in the broader market, my answer is ‘Absolutely! One should buy the dip’,” said Chandra.Also Read | Market behaviour slightly worrying, says Aberdeen Investment; bets on IT, tech cosOn Monday, Nifty Midcap 100 closed 1.7 percent lower whereas Nifty Smallcap 100 ended down 2.3 percent.Stocks such as Indian Energy Exchange (IEX), Multi Commodity Exchange of India (MCX), Tata Power Co, Indian Railway Catering and Tourism Corporation (IRCTC), Trent, Coforge and Dixon Technologies India contributed the most to the losses in the midcap and smallcap indices today.IRCTC shares have shed 31 percent in the past one week, and others have fallen around 10-15 percent during the period. IRCTC crashed 12 percent alone today whereas Coforge had tumbled 11 percent.Purvesh Shelatkar, head of institutional broking at Monarch Networth Capital believes that one should be ready to buy the dip, but not be in a hurry.He believes that bouts of profit-taking are likely till Diwali or most likely till the end of Q2 earnings season which may keep volatility high.“One should certainly buy midcap and smallcap stocks that have fallen quite a bit, but also be mindful of their performance so far and pick companies that offer revenue and earnings visibility,” Shelatkar quickly added.Also Read | Kotak AMC expects banking rally; bets on industrials, home improvement sectorsHe says playing the reopening theme and betting on stocks such as InterGlobe Aviation, SpiceJet, and some hotel companies could be a smart investment strategy.Some technical chartists believe that a large part of the selling in the broader market is behind us and one could look at accumulating midcap and smallcap information technology stocks in their portfolio.“I see most of the IT stocks in the mid- and small-cap space, trading close to their support levels, which means there is scope for an upside in these stocks,” said Kkunal Parar, Vice-President of Research at Choice Broking.