Very weak global cues

Dear friends,

Once again Nifty fell today due to weak global cues. Nifty closed 101 points lower at 10094.  European and US markets all down by around 2% right now. It is likely that Indian markets will open negatively tomorrow due to weak global cues.

Nifty is still in Don’t Buy zone.

The indications for individual stocks for short term are –

DON’T BUY – HINDALCO, SBI, TCS, VEDANTA, YES BANK, AXIS BANK, HDFC BANK, RELIANCE INDUSTRIES, ITC, ASIAN PAINT, HDFC

HOLD – TITAN, M&M

WAIT TO BUY – MARUTI

WAIT TO SELL – INFOSYS

Nothing to buy for short term.

Long term investors should continue their monthly investments in bluechips companies. Do not fear market fall. Get excited that stocks are available at lower prices.

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Question – 

What are the common mistakes that new investors commit in Stock Markets?

Answer – 

There are many mistakes which investors do but new investors make some very common mistakes:

1. Stop investing regularly when markets start falling – Investing regularly is a very important aspect for long term investing but many news investors invest only when markets rise and when it starts falling continuously, then they stop buying and sell all their shares and get out of stock markets. Statistics has proven that investing regularly in good companies over long term irrespective of markets ups and downs has resulted in earning good returns.

2. Listening and asking advice of neighbours/friends who do not know much about Stock Markets – most people around us do not encourage investing in Stocks. They only suggest FDs, Post office Deposits, Insurance etc which give returns much below inflation. Once new investors start investing in stocks too, they ask unqualified people who do not know about Stock Markets and get mislead or get wrong advice.

3. Blindly taking advice from brokers/insurance agents/bank managers – many new investors ask brokers on which companies to invest. Usually, brokers do not encourage long term investing and motivate investors to do intra-day trading which is very risky. New investors try intra-day trading and lose money and then lose interest in Stock Markets itself without understanding that Stock markets cannot be blamed for the loss. We need to understand and analyse all instruments before investing. Do not blindly invest.

4. Lack of patience – new investors expect instant profits for long term and expect their shares to only go up and never fall. Stock Markets in the short term go up and down and even good companies fall due to negative sentiment in the markets and also overall market trend. However, in the long term, only good companies with strong fundamentals and performance give good returns and the profits are earned over many years and not a few months. This is a very important lesson for investors. As they say, ‘nothing is built overnight!’

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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)