It reminded me of March 20 when the global markets crashed on the apprehensions of coronavirus alleged to have been transmitted from Wuhan, China. Indexes alarmingly collapsed to lower levels and stocks sent shivers down the fragile spine of investors globally.
However, the brave souls who showed confidence and resilience in the financial markets were soon rewarded as the markets rebounded scaling new heights after a few months. Dow Jones, Nasdaq, Sensex, and all global indices not only retrieved their lost glories but also attained unprecedented levels.
Dow crossing 31000 and Nasdaq easing past 13000 levels was like leading from the front. The investors reposing confidence in the fundamentals having invested with due diligence were suitably rewarded as the stocks picked up during the pandemic multiplied their wealth multiple times.
Tesla, Amazon, Zoom in USA and Reliance, Bajaj Finance, TCS from India jumped to higher levels. Exactly after 11 months, we have witnessed another collapse again. It started from China and like a virus butchering the US, Australia, and Asian markets in no uncertain manner.
India following the Asian markets lost 1939 points on BSE and more than 500 points on Sensex. It was a double shock for Indian investors as many lost big money on Wednesday due to a glitch at the NSE resulting in interruption of business for more than four hours. Poor guys!! suffering losses for none of their faults. Huge losses accrued to the traders and today’s fall has added miseries to these investors again. US markets will be opening later tonight to decide the direction of global markets on Monday.
Bond yields to the extent of 1.61% have made the big investors exiting stock markets and preferring bonds for safe investment. This migration of funds will certainly impact the market sentiments. All markets will be watching Dow movements tonight and any good news will help recovery on Monday.
My genuine advice for the investors to maintain their composure and sit tight by selecting a few Cherry picks with cheaper valuation on the way. However, traders to sit on the sidelines for a few sessions and watch only the movements in this volatile turbulent market. Those who can’t resist the temptations must keep themselves covered by marking a stop loss to minimize the exposure. Avoid playing index and bet on the fundamentally strong stocks with lot of promise and potential. There are many in the market that you need to identify
Good luck! Friends
Success usually comes to those who are too busy to be looking for it….
Hi Friends, We all understand that a Retail INVESTOR can’t tabulate and analyze each and every relevant information about any company before opting to buy shares from the stock market. In fact, he is always prompted by his inner instinct to put his hard-earned money in the stock market after observing a few trading sessions or hearing some hot news about the company. Sometimes a tip from the so-called experts or friends may lure him to try his luck by investing in the recommended scrips. Statistics prove that such investors end up losing money which keeps them away from this most efficient high yielding investment avenue in the future.
The Truth:
(1)Less than 10% of investors earn money from the stock markets but those who do are long time investors earning big returns
(2) Most Demat accounts opened by customers turn inactive after carrying out a few transactions in India
(3) More than 75% of Demat accounts are inactive as per the SEBI guidelines in India. The only reason of these abnormal figures could be customers losing money during the early few trades forcing them to leave the market. Strange!!
THE FACT: Only those investors earn big who show resilience and continued confidence by remaining invested in the stock market for longer periods of time.
Extracting observations from the experiences of successful investors and utilising my personal sweet/sour/bitter encounters over the past few years, I have tried to come up with a visibly foolproof technique of venturing into the stock market by small-time investors. Hope this will not only mitigate the risk of losses but help in ensuring good returns by investing wisely. This is going to be a simple exercise that does not require any calculator or assistance from your financial advisor or experts. Great!!
Please grab a pen and a piece of paper to scribble down some personal information while sipping tea/coffee or a fresh lemon juice sitting in a cozy relaxed environment. Don’t worry!! It’s not that personal. Be comfortable!!
Can you take me through your day’s journey by writing down the products you have used today. I am sure the list of products will appear somewhat like below:
I have tried to reorganize the list of your daily use products from Breakfast to Dinner in four tables as exhibited above. Simple! There is nothing techincal about it. You will agree that these items are more or less the same which are used by everybody around you in your neighbourhood. Please have a close look at the names of companies manufacturing these products or providing services to their customers through a network of outlets spread across the country..
Now coming to the companies manufacturing these daily use products or providing services, you will appreciate that these are established brands and market leaders in their respective categories. They have established brand value, continued patronage from their customers, ever-increasing sales, persistent dividends, increase in value and, a great future. Don’t you feel safe and privileged to be associated with the names of these big market leaders?
I will prompt you to visit the screener.in website and see for yourself how encouraging the results must be about these companies over the past few years. Please click: https://www.screener.in/ to find out information about any listed company without spending even a penny.
Another look at the shareholding pattern will make you more enlightened with the following information: Yes! You can google this information easily:
Promoter’s Contribution
Contribution of MF/Financial Institutions
Pledge of Shares if any by the promoters
Promoter’s confidence in their own company can be gauged from the shareholding pattern. Companies with promoters contribution of 50% and above without any incident of pledging their shares are considered a good bet for investment.
Similarly, those companies where Mutual Funds/Financial Institutions have considerable stake stand to gain the confidence of retail investors. The Mutual Fund Companies and Financial Institutions consider buying shares of any company after thorough scrutiny and future potential by the highly paid and qualified analysts/fund managers. Your task is made easier by the professionals working with these Funds as they have the responsibilty for safety and regular growth of investments received from their investors.
Are you feeling confident now? Come on! have a deep breath and find out the crucial information about the companies as suggested in the foregoing para. Enlighten yourself by spending a few minutes on the data and come out with a glow on your face. I know you are feeling a lot more informed and convincing to take an informed decision.
I will not recommend for you to rush and grab these shares with whatever money you have in your Bank account. You need to plan your investments by identifying 5 companies initially. Start investing through SIP only. Set aside Rs10000/- every month and start investing through SIP at least for five years. However depending upon availability of funds, you can identify, a few more stocks for investment after a few months. The growth could be smaller as compared to the more risky portfolio of small and medium cap companies but the experience will make you richer and more assured to consider investing in these companies in the future also.
Friends! Please note that volatility is the inherent nature of stock markets all over the world. All securities being traded in the stock market tend to fluctuate many times during the day. In case you keep tracking the market movements every minute, there is every possibility of getting tempted to exit or enter the market at the wrong time. This habit can trap a retail investor in selling or buying shares accruing avoidable losses.
Proffer your investments a breathing space to grow!!!
Warning:: Don’t keep watching your portfolio every hour/every day
Friends, I have tried to be very honest and straight on the subject but there could be some information that you might have anticipated but left out inadvertently. Please let me know to cover it in my next effort.
MoneyXTension: Financial Freedom 