Thursday, November 24, 2011

Dare to Dream

Greetings to Readers,

At Current market level investors are not enthusiastic to invest in Equity Mutual funds. The market is under pressure of lot of negative news. One can see current market situation with following dimensions.
  • Indian Equity Market has seen tough times before on various occasions, even though the sensex Long-term return is 15%+.
  • When an investor is entering in equity at lower sensex, his probability of loss is low or the quantum of loss is low (and higher possibility of earning good returns).
  • Almost all domestic & international negative news are discounted / factored in sensex. So buying at current level means buying stock of all those investors who are throwing away stocks at cheap prices.
  • Investors should consider share prices V/S corporate earnings of stocks. When corporate earnings is expected to grow or remain at parallel level but the stock prices are going down, means stocks are available at cheap levels, Is this a time to grab the opportunity?
  • Investors should put together performance of all economies. The possibility of revival of Indian economy is very high compare of other economies.
  • The most dangerous challenge to Indian Economy is inflation & current a/c deficit. They are not lifelong issues. The main culprit is crude oil prices.
  • The crude oil price itself is very volatile & in last 4 years we have seen the range of $ 60 to $145 & down to $35 & now near to $100. It is purely on speculation. All speculations are always settled over a period of time. It never lasts forever. That is main relaxing fact.
Surrounded by all negatives, even single positive indication may spark. Sir John Franklin Templeton has rightly said “Only unexpected is expected from the market”

This market crash is an investment opportunity for investors having 3 years+ horizon & expect good returns from equities in time to come. At least it is wise to enter in equities when others are afraid of market. Logically at downward market there are few sellers. They believe that why to sell at bottom? They prefer to hold equities for some more time. Slowly market stabilizes & all of a sudden market takes upward move at Rocket speed. The general trend of investors is mostly on herd mentality. Only smart investors take smart decisions and ride on the market.

This has proved for several times. Will this repeat once again? Would you “Dare to Dream”? Would you like a ride at Rocket speed?

Investors must be aware with the risk / benefits attached to the investment schemes in which they are investing. The key to success is to identify the risk / return attached at the time of investment.

There is always risk associated with equity market, but at current level, the difference is, the quantum of risk is less.

Our strong advise for Equity Investment.
  • We advise you to invest in Dividend yield MF Schemes. Investor is comfortable with regular dividend income from good cash rich dividend paying companies. (With possibility of capital appreciation when market takes U turn).
  • During the Mandi, investor prefers to protect the investments and to earn parallel regular income like fixed deposits and so prefer to buy Dividend Yield stocks.
  • Even the existing investors are not interested to sell the Dividend Yield Stocks, because at least they earn regular Dividend income from the stocks.