Rally continues in our markets

Blog meant for 10 April 2018 Tuesday

Dear friends,

Nifty closed positively today inspite of weak global cues on Friday. Asian markets were positive today morning and hence it helped our markets to go up. Nifty closed 48 points higher to end at 10379.

As of now, European markets are flat but US markets are up by around 1.5 % currently.

Nifty is in Hold zone for short term.

The indications for individual stocks for short term are –

DON’T BUY – VEDANTA, INFOSYS

HOLD – TITAN, MARUTI, M&M, ASIAN PAINT, HDFC BANK, HDFC, YES BANK, SBI

WAIT TO BUY – HINDALCO

TOO LATE TO BUY / HOLD – ITC

SELL – TCS

JUST BUY – AXIS BANK, RELIANCE INDUSTRIES

Keep it in mind that whenever you are entering into any short term trades, you must be alert and track the markets every night so that you will take required actions. Also, not all short term trades will give you profits or good profits. Many times, due to volatility in the markets, stocks can go in opposite direction of your expectation and hence you may end up with a small loss of 1-3%.

We should be ready for such a situation now and then. If you cannot bear even a small loss in short term, then there is almost no chance that you can make profits since markets work in such a way.

Long term investors should invest every month in bluechip shares. The short term fluctuations do not make much difference to investors who intend to hold for many years and sell after 10 or more years. When you see your long term portfolio after a few months of investing, there is always a chance that the current value could be less than invested amount. This is usually a notional and temporary reduction in value. As long as you hold good companies and hold them for long term, the chance of loss is almost zero.

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Question of the Day – 

As per the advice in the Workshop, I have been investing for long term, however suddenly a doubt came to my mind that, if stock broker agency goes bankrupt, what will happen to Investors money? In order to protect our money, what one needs to do?

Answer – 

Stock broker such Way2Wealth, Sharekhan, Motilal Oswal, Zerodha etc are brokerage companies who provide demat and trading account facilities.

To provide demat account facilities, they are agents of depositories – CDSL & NSDL which are two quasi government bodies. The shares we buy are held with the depository and the broker is only helping us buy them.

CDSL & NSDL are like electronic lockers for our shares, mutual funds etc. Just like how we use the locker facilities in banks to keep our valuables.

Hence, if a stock brokerage company closes down for whatever reason, our shares are safe since they are held with the depository and not by the broker.

The only thing that a broker holds is the cash balance in our trading account. This is the only thing the broker has control on. However, this money can be used for his personal requirements and it can only be used to buy shares or it has to be sent back to our savings bank account.

Generally, SEBI monitors all brokers are other institutions operating in the Stock Markets. Reputed and big brokerage companies cannot and will not get bankrupt. Only small and unknown brokers have a chance of mismanaging their business and becoming bankrupt or close down.

Hence, the system in our country with respect to demat and trading account is quite strong. Ensure that shares are being bought in our demat account only as per our instruction and not whatever the broker feels like. Any transaction in your account without your permission or instructions should be immediately informed to the broker and clarify the transaction.

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All the best!

Dr.Bharath Chandra and Rohan

Please do not comment on the blog. Any questions or clarifications can be asked by sending us an email with your registration number given to you during the Workshop. Questions without quoting registration number will not be answered.

(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)