Few Words on Market…

by Vivek Karwa, Certified Financial PlannerCM

150525 – Writing this article on the 365th day of the new dispensation at New Delhi. A year has passed since we heard about any major corruption issue at the top level. Many people keep saying that the corruption is still present in the country. Yes, it is present and will continue to be present for long time. The positive thing is, it is atleast not present at the top which was hurting the image of the country past few years. Whoever is heading the government should have a clean image and intentions.

The market has been volatile as expected. The overly ambitious expectations which people were carrying in the minds has tempered down now. We are in a state of economy which is poised to grow, but grow steadily and not due to some booster doses which do not last longer. If India has to grow, the foundation has to be corrected now and which seem to be happening.

Investors, particularly Indian investors still have huge doubts if the country and the market can actually grow in the balance 4 yrs term of this govt. One needs to have faith on the structure of the country and the abilities of the entrepreneurs running both small and large corporations. We have the ability to adjust to any economic condition and laws. And if we can get a clear, firm and government with certain direction, we can do wonders.

World leaders have turned bullish on India. Companies across the world are eager to set up base in the country. Most big, world leaders and CEOs of large companies have already visited India and met the administration. Name a rating agency, and they have already hinted that the country ratings may be improved if the present things improve further. Indian CEOs are turning positive and are ready to give some more time to the demand to pick up.

This will result in the improvement of both prices and participation in the market. Hence, one needs to be patient and remain invested and keep adding as and when the market corrects. Indian investors particularly lose out on the rallies since they enter late. This may repeat this time also. But we the participants in the market need to spread the word that one should start investing at least a portion of their savings to create wealth over a period of time.

SEBI is contemplating increase in the lot sizes of futures contracts in order to curb the participation of small and risk averse retail investors. It is a welcome move. Most of retail investors who lose money in the market is on account of this segment. If one invests for longer term in good quality companies they will surely end up making money and not have to go home with bad memories and heavy heart.

A small investor, rather any investor should always do their homework before entering in the market or the individual companies. Most don’t understand macro and micros and go with herd mentality. Such investors should always go through an adviser or through managed funds like mfs. Risk can be considerable reduced if you know exactly what you are doing.

Understanding every sector is also critical to investing right. As and when the economy picks up, expect the Banking, Capital Goods and Manufacturing companies to do well. These are sectors which have to naturally grow with the economy. One needs to know that when Index goes up it does not mean every stock also should move up. It is not pre 2008. The investors have matured a lot since then.

This Article will be Printed in the Investors Digest Magazine of TamilNadu Investors Association (SEBI Recognized)

Disclosure:- It is safe to assume that the author may have interest in the sectors recommended in this news letter. Seeking personal advice from your Financial Advisor is recommended before acting on any of the substance given herein. The numbers, figures, etc., presented may have been taken from various sources.

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