Blog meant for 11 June 2018 Monday
Dear friends,
On Friday, markets were very volatile. Nifty started quite weak and only towards the end of the day, it started to rise.
The Asian and European markets were weak and hence the weakness in our markets too. The US markets closed almost flat on Friday evening.
We have to see how markets open on Monday morning based on Asian market cues.
Nifty is in Hold zone for short term.
The indications for individual stocks for short term only are –
DON’T BUY – TITAN, VEDANTA, ITC, YES BANK
HOLD – INFOSYS, SBI, HDFC BANK, M&M, MARUTI, RELIANCE INDUSTRIES
WAIT TO SELL – HINDALCO, ASIAN PAINT
JUST BUY – TCS (you can wait for one more day and then decide to buy or Buy tomorrow but be ready for downward movement too if markets are weak tomorrow)
SELL – AXIS BANK, HDFC (As mentioned in the blog previously, we had to be careful about profit booking. Both the shares have fallen on Friday and hence showing Sell indication. Even if you have incurred some loss, better to sell since many times when we hold on to it, it fall further and we may incur bigger loss in short term)
In short term, sometimes, certain transactions make produce a small loss of 1-2%. This is part of how markets work. However, overall when you check over a period of 1 year, the profits will cover up all the small losses and you may get 20-30% per annum or more.
Long term investors can continue to invest every month regularly. Do not neglect long term investments for any reasons.
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Question from our Participant –
Since we are seeing a correction/fall in markets, when will the fall stop so that we can buy stocks for long term at that time?
Answer –
This question is an interesting question and comes to most investors mind. However, nobody can predict what will the lowest level for the markets nor can anybody predict when the markets will reach the lowest level.
This is the reason regular SIP investing helps investors by not needing them to predict highs or lows of the markets. Investing will happen every month regularly whether the markets move up or down. As long as the investments are being made in the leaders of the sectors, they can continue to hold it while regularly monitoring the business performance.
Selling decision comes either when certain companies have been continuously reporting poor profits/losses or when we need the money many years later for various events in our life such as for children or for our own future.
Do not try to guess lows and highs of the markets. Millions have already tried it and have failed since it is not possible.
Do not stop monthly investments just because markets are falling. In fact such situations, you must be excited to invest for long term since prices are falling and we are able to buy many companies at lower prices than earlier.
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All the best!
Dr.Bharath Chandra and Rohan
