MFF – 141231

We are the Third Best performing stock market in 2014! #Sensex gave us 29.9% and #China was ahead with 43% and the No.1 was Argentina! Many would get surprised with #Argentina on top because as #IndianInvestors we are used to talking about China and US markets more than any other markets! #DowJones has delivered just 8.5% in 2014. One more surprise: Another best market after India in the list is #Pakistan!

You may think, Stock Market is supposed to be performing good only when everything in the economy is going good! Nothing is going right in Pakistan, then how can they be in the list of top performing markets? Markets at times are irrational, and that’s the very reason why Indian markets also performed not very bad, from the year 2009 to 2014, in spite of we witnessing ‘a scam a day’ and total policy paralysis with almost Rs.18 Lakh Crore worth of project getting stuck! (Hope you got the answer why your Infrastructure Funds gave negative returns).

Some of you may now think that markets perform in expectation of better future and hence Pakistan would have performed, expecting a better future! Well, frankly we have no clue why it performed! May be it was a distressed market and had a good run! But we are sure that Indian market is performing ‘Anticipating the #AccheDin!

Index

As on 31.12.2013

As on 31.12.2014

% Change

#BSE100

6327

8369

32.27

#BSE200

2530

3428

35.49

#BSE500

7828

10722

36.97

#Sensex

21171

27499

29.89

#Bankex

13001

21458

65.05

#BSEAuto

11569

18631

61.00

#DOWJones

16577

17984

(30.12.14)

8.49

We were Absolutely Right on two counts in 2014. Firstly, in the beginning of the year 2014, we had predicted a Sensex on 28630 – 30006 (refer old articles under Category: MarketFastFood) as a possibility within 18 months! The recent high which the Sensex hit before correcting was a tad above 28630! Bingo!

Secondly, the top sector which we predicted was the #Banking, it has delivered 65% in last one year! Now, better keep in mind that we are not God and hence, not necessary that 2015 will go down the history as we predict! Better consult your Financial Adviser before taking any further steps! Standard Disclaimer J

Enough of #Modi rally! It’s all over! The market will move further only on Modi’s Actions! If the action goes missing the market will surely get punctured! The honeymoon is over. The government is fully aware of it, and that’s the reason we are finally seeing action on the economic front!

The opposition may call it Ordinance Terror! Doesn’t matter until it’s going to do good to the country. If we are serious in attracting investments into the country, we have to change some rules which are acting as big speed breakers. Not to forget, whichever party is in opposition, they have to oppose! Their job is to come to power, but as common citizens we need to support what is good for the nation! Opposition forgets that when they were in power, they tried to bring an ordinance just a week before a politician was about to be sentenced in a corruption case, just to protect him!

The earlier government did a very good job of bringing the One Person Company and the LLP concept in the Companies Bill’2013. But that alone could not ease the difficulty of doing business in our country. Hence, amendments are required. A decade has passed without achieving much! Many careers have been lost or slowed down due to bad policies, thus we require a big change and big shift in our attitude.

So are we in the right direction? The initial steps taken by the government says so. They have been slow and steady which is actually good for the situation. The global situation remains critical. There are problems across and thus the risk of sudden redemptions, always stay. Don’t expect market to be as stable as in 2014. Volatility has already set in. Though we may do well in 2015, the ride should be roller coaster one! Such rides keeps away non serious investors from market.

In case we fall, the Sensex should find the best support in the range of 25500 – 25000. And the worst case scenario may take us to the levels of 24700 – 24300. In case of such drops on the index, the opportunity should be blindly used to buy quality stocks, if you can remain invested for next 3 – 4 yrs! If you can control your fear and invest on such occasions, you would laugh your way to the bank! The extra amounts which you invest on such occasions can always be withdrawn later and let the profits alone ride the market.

The Indian Basket of Crude is trading below the levels of $53 a Barrel right now (31.12.14 19:44 Hrs), what other news can be a better news for country like ours apart from having a majority government? The crude may shake many economies but will benefit ours! We are here to make money and hence if it’s going to benefit our market so be it! If other economies become cheaper in the process, we can travel there and contribute some dollars. J

Hence, volatility will be there, but the trend remains intact and we should move up. Sensex levels of 33600 – 35000 does not look impossible for the year 2015. We first need to break the upper range of the target give in 2014, i.e. 30006, once that is done, we shall revisit the target and modify the same if required! (Sensex Target 2015)

Apart from crude the prices of almost all industrial commodities are trading at all time lows! Bharat is a consumption economy! We will continue to consume more, so cheaper prices will help us by lower capital requirement.

Budget session will be watched closely! This will be the first full year budget. Expectations remain high. The Finance Minister needs to take radical steps like introducing the Gold Bonds which the earlier government failed to introduce! Apart from a radical budget, the government needs to pass the legislations. Let’s hope the smaller opposition parties don’t harm the country for their petty politics.

Economic related sectors should do well. Little homework can help you beat inflation easily with your investments. Sectors like Banking, Engineering, select Infra companies may lead the next rally. As I write this article there are few companies which are hitting the mind, which may double in next 3 – 5 yrs. Finally even the DII’s have got bullish on Indian Markets. They have Nett. Invested after three years!

Invest sensibly and take full advantage of the better future which is likely to arrive soon!

Wish you all a very Happy 2015. Set Goals!

At Investors Service – Always

VIVEK KARWA

Investment Adviser and Wealth Creator

Contact Details: https://vridhi.co.in/contact-us/

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