Positive today but may be negative tomorrow again

Blog meant for 9 Feb 2018 Friday

Dear friends,

As expected, positive global cues pushed our markets higher today. Nifty climbed up by 100 points to close at 10576. However, global cues are back to being negative tonight. European markets and US markets are heavily negative and hence our markets will most likely be negative tomorrow.

The analysis for Short term as per technical analysis is as follows:

Nifty is in Don’t Buy zone.
The indications for individual stocks are –




There are no fresh buy indications for short term. Just observe markets and buy only for long term.


The following is an interesting article talking about the impact of long term capital gains tax on Equity Mutual Funds – https://economictimes.indiatimes.com/markets/stocks/news/whats-the-impact-of-ltcg-tax-on-equity-mutual-funds/articleshow/62829484.cms

The impact on shares can be read here – https://economictimes.indiatimes.com/wealth/tax/budget-2018-how-ltcg-tax-on-shares-equity-mf-units-will-be-calculated-as-per-proposed-rules/articleshow/62743875.cms


Since over long term shares give a compounding effect, the tax on long term gains is not a major hurdle.

For example, if an investor invested a lumpsum amount of Rs.5,00,000 now and he got an average of 18% per annum returns for next 15 years. He would receive Rs.59,86,874. The total profit would be Rs.59,86,874 – Rs.5,00,000 = Rs.54,86,874

Hence long term capital gains tax will be 10% of Rs.54.86 lakhs which is Rs.5.48 lakhs

Investor will have net profit of around Rs.49.38.

If you calculate the CAGR it comes to 17.32 % per annum and not 18% due to the tax.

However, it is not 10% tax flat on the 18% earned. Many investors mistake it to be 18% – 1.8% = Rs.16.2 % per annum.

Hence, the percentage of returns you will make in long term even after paying tax will still be very attractive compared to all other investments where the tax rate is higher and returns are not as high as this.

All the best!

Dr.Bharath Chandra and Rohan

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(The above comments are only the personal views of the authors of this blog. Please do your own research before taking any investment decisions. The reader of this blog must understand and take full responsibility for the Profit or Loss made by taking actions based on the above views)

About the author

Dr. Bharath Chandra

Hi there! This is Dr. Bharath Chandra & Rohan, International Trainers & Success Coaches. We have addressed more than a crore people on Stock Market, Personality Development, Wealth Management and Financial Planning over the past 35 years.

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