1. Decide yourself: Read and listen about stock market tips and advice. But do your own research about stock and its business before buying shares. Think twice before buying hot stocks.
2. Don’t get panic: This is the most significant point. If you are a long term investor and invested in fundamentally sound companies, your money will give very good returns. Don’t exit your holdings and accumulate more if you have money. But don’t expect quick returns over short term.
3. Oil will cool down: Even though demand is more than supply, current crude oil price rise defied logic. Any rise due to speculation is unsustainable. Oil may rise to $160-170 levels over short term but will return to below $120 levels within 2-3 months. Global slowdown in economy will decrease the demand.
4. Don’t overestimate crisis: Don’t concentrate on negative triggers only. If you analyse the situation, one can find positive things like reasonable growth in economy and better than expected results by select companies etc. In my opinion, next 2 weeks will provide best investment opportunities for long term investors.
5. Don’t underestimate inflation: This is the real problem. In election year, Government will go to any extent to contain inflation. It is better to stay away from inflation sensitive sectors like Real Estate, Auto and Banking.
6. Growth is still there: In my opinion, Indian GDP will still grow by around 7.5% which is very high in the current gloomy environment. How long foreign investors neglect fast growing Indian economy? Mutual funds and insurance companies are sitting on huge cash. They will deploy once Sensex fell to below 13,800 levels.
7. Sectors are crucial: If you invested in sectors like Real Estate and Airlines, who will save you in these days of high inflation and crude oil prices. Invest in sectors like CRAMS, alternative energy and niche companies etc.
8. Unbelievable returns: If you can accumulate good companies on every fall and invest in them for 2-3 years, such stocks will give wonderful returns over long term. Every sharp fall will be followed by reasonable Bull Run.
9. Keep some cash: Never invest 100% of your money in falling markets. Current volatile markets will give good opportunities for accumulation due to panic selling by investors. Open offers and buy backs provide short term investment opportunities.
10. Believe in stock markets: There is a clear slow down in economy but India story is still good when compared to countries like US which are already in recession. Mutual funds are not facing any redemption pressures which indicate the faith shown by investors in the stock markets. Only concern is valuations which are still high when compared to other emerging economies.
2. Don’t get panic: This is the most significant point. If you are a long term investor and invested in fundamentally sound companies, your money will give very good returns. Don’t exit your holdings and accumulate more if you have money. But don’t expect quick returns over short term.
3. Oil will cool down: Even though demand is more than supply, current crude oil price rise defied logic. Any rise due to speculation is unsustainable. Oil may rise to $160-170 levels over short term but will return to below $120 levels within 2-3 months. Global slowdown in economy will decrease the demand.
4. Don’t overestimate crisis: Don’t concentrate on negative triggers only. If you analyse the situation, one can find positive things like reasonable growth in economy and better than expected results by select companies etc. In my opinion, next 2 weeks will provide best investment opportunities for long term investors.
5. Don’t underestimate inflation: This is the real problem. In election year, Government will go to any extent to contain inflation. It is better to stay away from inflation sensitive sectors like Real Estate, Auto and Banking.
6. Growth is still there: In my opinion, Indian GDP will still grow by around 7.5% which is very high in the current gloomy environment. How long foreign investors neglect fast growing Indian economy? Mutual funds and insurance companies are sitting on huge cash. They will deploy once Sensex fell to below 13,800 levels.
7. Sectors are crucial: If you invested in sectors like Real Estate and Airlines, who will save you in these days of high inflation and crude oil prices. Invest in sectors like CRAMS, alternative energy and niche companies etc.
8. Unbelievable returns: If you can accumulate good companies on every fall and invest in them for 2-3 years, such stocks will give wonderful returns over long term. Every sharp fall will be followed by reasonable Bull Run.
9. Keep some cash: Never invest 100% of your money in falling markets. Current volatile markets will give good opportunities for accumulation due to panic selling by investors. Open offers and buy backs provide short term investment opportunities.
10. Believe in stock markets: There is a clear slow down in economy but India story is still good when compared to countries like US which are already in recession. Mutual funds are not facing any redemption pressures which indicate the faith shown by investors in the stock markets. Only concern is valuations which are still high when compared to other emerging economies.
Dr Krishana
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