Friday, June 23, 2006

Indian Stock Market Swings

Disclaimer : I am not a stock market expert or Investment Advisor

The stock market in India seems to be swinging more than anybody could understand. In past 2 months since the market started bear phase(downturn), I have been observing following :

1.No or very less Ads in TV/Radio/News Paper on Mutual Funds
2.Investment Advisors have stopped giving recommendations !!
3.Everybody who invested recently(2-3 months back), lost lot of money :(

So it seems that people who where so bullish about the market, suddenly stopped talking about it :) ..Which is not a reality.

Equity Investments were always risky, just that in last 1 year it was too good to believe & everybody was jumping in it..thinking that it will be like this always :) .

So this recent crash has made people think more logically & re-look at their portfolio. I know people who exited after the crash..

I still feel that one should expect good returns in long term taking into account the short term risks sometimes. That way you are more reasonable & will not become emotional while investing you hard-earned money.

I was doing some research on some websites about the funds who performed better than others(that means gave less -ve returns !!) in past 2 months !!..Here some of them : Ratings are as per

1. Sundaram Select Midcap
2. Magnum Contra
3. Magnum Global
4. HDFC Equity-G

The above funds which I listed above are on the TOP of my list !! ..Again these are based on my research as per current performance. I looked at the funds which are at least 3 years old & have out-performed the Sensex/Nifty even in the crash.

Earlier whenever Investment Advisor used to tell us that, do not expect mroe than 10-12% returns from Equity Market MF, I used to think how it can be .as we were all seeing the upword trend for long time :) ..But now everyone knows that its really risky in investing in Equity. So follow these guidelines always :

1. Only Invest if you have cash left with you which dont need for next 1 or 2 years
2. Investment with Mutual Funds with previous track record only
3. NFO's can be tried, but they are very risky times.
4. Always do you own research to understand what the Fund delivers & what's its Portfolio(Not all funds are same).
5. Diversify within Funds if you can
6. Last but not least : Invest some part through SIP for sure.

For past 1 market is again showing some continuous upword trend :) ..So its a good sign, but again watch out & be careful before investing...But do Invest if you can !!!

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