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Markets are looking up and investors are confident that this festive season will yield good returns for them

 


After a long wait of five years, equity indices are nearing their highs recorded in January 2008. While the Nifty has crossed the level of 6100, the BSE Sensex is inching closer to 21000. It is certainly a change in mood for investors who can see their portfolio value reaching to their levels closer to that of January 2008. Some of the individual investors are thinking of getting out as they can exit at cost. However it may not the best decision. You have watered the 'Chinese bamboo' – Indian equities, in the last five years and the time is to see it grow and reap its benefits. However for that you have to remain invested in equities.


Equity markets reward those who are patient and consistent in their investments. It is the time to own quality companies and remain invested in them. A look at the last five years reflects this. Throughout the turbulent times, we have seen companies with strong balance sheets doing well and rewarding shareholders with consistent growth in the profits year after year. There may not be proportionate growth in the share price of some such companies, however most experts agree on the fact that as markets catch up, their share prices too will follow their earnings growth. As perceptions change and investor interest come back, the same companies see massive rerating on the stock exchanges and their stock prices start moving up.


At present, markets are polarized and participants in markets are focusing on select companies and sectors and there is a lot of value in both large and mid cap stocks in various sectors. Keeping aside the leading names, the broad market is far away from where it was in the Bull Run that Indian equities saw in 2007. Hence, this is the time to pick good companies and start accumulating the shares with a three to five year view.
Given the weak economic scenario, you may not be really keen to load your portfolio up with equities. But most smart investors want to highlight the fact that maximum wealth is created when you invest in the worst economic scenario. Amidst the grim economic scenario the broad markets are not in a mood to run away to make quick buck. Our Finance Minister is of the opinion that the economy may see a good recovery in the second half of the current fiscal year. India goes for elections next year and a stable government can bring in much awaited economic reforms and policy decisions that would benefit the economy as a whole. Interest rates for time being are high and many people are jumping in fixed income investments ignoring high inflation. However as inflation tapers down, there is a high possibility that the interest rates in Indian economy come down next year after an average monsoon. Low interest rates, stable government, economic reforms and buoyant sentiment set the stage perfect for high economic growth in India.


And that is where the opportunity is. You have enough time on your hand to participate in this opportunity. If you are good at identifying quality stocks that would benefit from this up-cycle in economic activity in India, you may choose to enroll for an equity SIP that helps you buy particular number of shares at regular interval, month on month. Most reputed brokerages do offer this facility. If you are not sure of your stock pick, you can also access the research reports offered by your brokers. If you do not have the time to conduct the research and keep a track of the markets, go for a traditional systematic investment plan in equity mutual fund.


Hence, this Diwali start accumulating the good stocks in a staggered manner that would create wealth for you over the next three to five years.

Happy Investing!!

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You can write back to us at PrajnaCapital [at] Gmail [dot] Com

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Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

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These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

  1. ICICI Prudential Tax Plan Invest Online
  2. HDFC TaxSaver Invest Online
  3. DSP BlackRock Tax Saver Fund Invest Online
  4. Reliance Tax Saver (ELSS) Fund Invest Online
  5. Birla Sun Life Tax Relief '96 Invest Online
  6. IDFC Tax Advantage (ELSS) Fund Invest Online
  7. SBI Magnum Tax Gain Scheme 1993 Invest Online
  8. Sundaram Tax Saver Invest Online
  9. Edelweiss ELSS Invest Online

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Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Birla Sun Life Front Line Equity Fund
    2. Large and Midcap Funds Invest Online
      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
    1. Mid and SmallCap Funds Invest Online
      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
    1. Small and MicroCap Funds Invest Online
      1. DSP BlackRock MicroCap Fund
    1. Sector Funds Invest Online
      1. Reliance Banking Fund
      2. Reliance Banking Fund
    1. Tax Saver MutualFunds Invest Online
      1. ICICI Prudential Tax Plan
      2. HDFC Taxsaver
      3. DSP BlackRock Tax Saver Fund
      4. Reliance Tax Saver (ELSS) Fund
    2. Gold Mutual Funds Invest Online
      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund

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