Nifty once again in Sell zone

Blog meant for 13 Dec 2016 Tuesday

Dear friends,

Just as it was looking as if markets were rallying, the markets fell today to close 91 points lower. Also, the global cues were weak in Asia and also in Europe and US.

Let us see if markets consolidate further or recover from today’s fall.

There is no action to be taken for short term since markets have once again slipped into the Sell zone.

Nifty is in Sell zone. As per 30 days moving average graph, the following are the indications for short term –

Wait to Buy – L&T, TCS

Hold – Infosys

Don’t Buy – L&T, M&M, Axis Bank, HDFC Bank, HDFC, Titan, Maruti

An interesting fact about long term investing. If we invest only Rs.5,000 per month for the next 20 years and earn an average of 15% p.a. returns, the amount after 20 years will be almost Rs.76 lakhs. The above calculation is very conservative and if we increase the amount of investment per month over a period as well as have capacity to hold for longer period, then the returns will be much higher.

If we invested Rs.5,000 per month and earnt 15% p.a and held it for 25 years, then the amount would drastically increase to Rs.1.6 crores. This is the power of compounding. Also, there will be no tax on the amount you receive by selling the shares at the end since long term capital gains are tax free.

Another point is that at the end of 20 or 25 years, we will sell only what amount we require for a specific purpose and not the entire portfolio, thereby leaving the remaining investment to continue to grow.

Hence, never miss a chance to invest for long term in good quality companies,

All the best!

Dr.Bharath Chandra