Prajna Capital - An Investment Guide

How you can gauge volatility of a stock and evaluate stock value The stock market movements over the past few weeks can be best described as unpredictable. It goes a few impressive points up, only to slide back after a few days. The upward and downward fluctuations can create panic among investors. Returns on stocks become increasingly difficult to predict over the short term. It may be a reaction to global market conditions, high oil prices, world economy and soaring inflation. Volatile markets torment investors. How do you measure market stability? A measure of volatility gives ample information for an investor to base his decisions. The time to enter, buy or sell, are critical decisions that depend on market moods. Shrewd investors find volatile markets or crashes an ideal time for picking value stocks at bargain prices. Since these are purchased at discounted rates, it gives a sufficient cushion for the long-term investor. Though scouting for bargain stocks may appear a lu...

Staying invested may not be the best option if you have chosen wrong funds or poor script If you were to take a look at the performance report of the mutual fund industry, you won't find too many impressive performers in the last couple of quarters. While the stock market in general has lost over 30-35 percent in the last two quarters, the scenario is even more ghastly in the case of mutual funds. Many aggressive funds have lost as much as 40 percent and most new funds are sitting on a loss of nearly 50 percent. The current scenario is bound to make the investor worry. For those who made an entry into equity a few years, ago, the current scene is bound to be more painful as they are faced with negative returns for the first time. The uninterrupted Bull Run from 2004-08 had made many forget the realities of risk associated with equity . In fact, many dabbled in mutual funds too like stocks . Some even thought that with mutual funds, there was no risk as the fund manager was expecte...

Mr. Iyer made very clear to his investment advisor that he does not like taking risk. A normal thought that would cross any advisor’s mind when an investor states what Mr. Iyer said is either that the investor does not want to risk his capital and wants to ensure that his capital remains intact or the second thought is that the investor does not want to face the risk of running out or falling short of money when he is nearing his financial goal. While a lay investor might struggle to put both the above in perspective, reality is there can be vast difference in perseverance of risk. When normally an investor opts for so called safe investment avenues such as fixed deposit, he is protecting himself against the risk of volatility. He seeks comfort under the disguise shelter of safety of capital. However at the very same moment he is risking himself against the risk of losing out to inflation in the long run. His investments earn negative real rate of return . This means he may not have en...