Skip to main content

Some tips for individual investors for investment planning

These days, the stock markets are quite volatile in nature with a bearish bias. Rallies do not last long in the markets and peaks of market rallies are reducing. The markets are hitting fresh lows in every fall. Many blue chip stocks are trading 50 percent lower than their high levels. Many stocks are currently trading at their year's low prices or all-time low prices. Many investors have lost their hard-earned money and many others are stuck with stocks that have corrected heavily in the last few weeks.

Here are some tips for investors already invested in the stock markets:

1) Hold fundamentally strong options

The domestic macroeconomic fundamentals are strong. The GDP growth rate is expected to slow down slightly from the nine percent last year to around 7 - 7.5 percent this year. This is still quite good and encouraging in comparison to other developed countries. The current market crash can be attributed largely to foreign institutional investors' (FIIs) outflows but FIIs will come back once the global financial turmoil settles down. Therefore, investors who are invested in blue chip or fundamentally strong mid-caps should hold on to their positions.

2) Go for value picks

The current market fall is quite steep and many investors (especially small investors) did not have the time to exit from their positions. Market sentiments are quite bearish at the moment and a further fall from current levels cannot be ruled out. Market traders and analysts are expecting more negative news coming from the global as well as local macroeconomic front. Investors with a high risk appetite can look at accumulating fundamentally-strong stocks at current levels.

3) Switch sectors

Currently, the markets are looking oversold after the recent corrections. There could be some bounce back in the days to come. Investors stuck in fundamentally-weak stocks should look at switching their positions to fundamentally strong stocks and sectors.


Here are some tips for investors looking at making fresh investments in the stock markets:

  • Study stock and price

First of all, it is important to identify the stocks that have fundamental value at current prices. Investing in a stock at right price differentiates between a bad investment, good investment and a great investment.

  • Research stocks

The stock market requires constant study and investigation. Finding a good stock at the right price is not a onetime exercise. It is a continuous process. Active investors in stock markets should always monitor their invested stocks and other stocks with potential to invest in.

  • Systematic investing

Currently, the markets are going through a bearish phase. Investors should be extra careful while making investments in a bearish phase. It is advisable to accumulate stocks by investing your funds in small lots. In a bearish market phase, even fundamentally-good stocks correct heavily at times. Therefore, it is very important to have patience and not panic in these conditions.

  • Liquidity

Liquidity and having a cash position is the key to success in a bearish market phase. Investors should start investing in identified strong stocks and continue to accumulate them on further corrections.

  • Analyse risk appetite

Investors should only invest their risk capital in the stock markets. Also, investors should always have a long-term horizon while investing in the stock markets (more than one year at least). Investors should never borrow to invest in the markets.

  • Avoid penny stocks


Investors should stay away from investing in penny stocks. Usually, there is very little information available and also these stocks do not have enough liquidity in the market. As a result, investors get trapped in these penny stocks and lose their capital, and any further opportunity during a correction phase.

Popular posts from this blog

Group Health Insurance

Buy Group Health Insurance Online   For Human Resources, the biggest challenge today is to decide whether medical benefits should be offered to employees or not, what type of plans should be offered, what will be the cost and how will the cost be split between employees and employer. Well, most of these are subjective and would depend on a lot of factors including company size, average employee salary, etc. However, this article will give you a fair idea on how you should go about deciding these factors: 1. Why offer group health insurance benefit to employees : Studies have proved that retention rates among employers offering GHI are much higher than the ones who are not offering. Moreover, the cost of providing this benefit as a percentage of salary is very low as compared to the perceived value. As an example, say if average salary of an employee in your organization is 4 LPA. If you decide to offer a health insurance benefit to him for a Sum insured of ...

ICICI Prudential Dynamic Plan Invest Online

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   ICICI Prudential Dynamic Plan             Invest Online This fund does remarkably well during falling markets, but fails to show the same prowess during a rising market. The fund sticks to its mandate to adapt to the dynamic nature of the market by shuttling between debt and equity. It takes aggressive asset calls in equity when the market surges by investing in quality mid-cap stocks. At the same time, it adopts a defensive strategy by investing in debt and cash when markets get overvalued, making it a good long-term choice.     For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call     Leave a missed Call on 94 8300 8300   Leave your comment with mail ID and we will ...

Why credit history is critical?

Will you need a loan to buy a car or a house? Do you know why some people get their loans sanctioned quickly without any hassle, whereas others find that their approval is delayed or their application is rejected? If you want a loan, you will need to work to build a solid credit history because this can have a bearing on the ease with which you get loans. Read on to learn more about what is a credit history and how to build a good credit score. What is a credit history? Your credit history is a way of tracking your credit behaviour and habits — basically it shows how disciplined and regular you are when it comes to repaying your dues on loans that you have taken. It will show a complete record of your past borrowing and repayment record including details about any late payments or if you have defaulted on a loan. This track record is readily accessible to lenders and is used by them to when reviewing your loan application. Borrowers who have historically had a bad record of managing...

Birla Sun Life MIP II Savings 5

  Birla Sun Life MIP II Savings 5 - Invest Online   Have you traditionally been a debt investor but now wish to test waters in equities? Then, debt-oriented funds such as Birla Sun Life MIP II Savings 5 (Birla Savings 5), which have limited exposure to equities, may fit your requirement. With a five year return of 10.5 per cent compounded annually, the fund managed a good 3-3.5 percentage points more than its benchmark Crisil MIP Blended Index, as well as its category average. The fund appears well poised to capitalise on a falling interest rate scenario and has increased the average portfolio duration of its debt instruments in recent times. Suitability Birla Savings 5 is suitable only for conservative investors. If you want to make a beginning in equities and cannot take any short-term declines in your stride, then this fund will suit you. If you are already an equity investor and want to use a debt-oriented fund merely as a diversifier, then you may prefer peers from the HDFC and Re...

Stock Market Concepts: Derivatives and taxation

DERIVATIVES refer to an instrument, which derives its value from the value of something else — that is, an underlying asset. In India, the derivatives space has traditionally been the playground for large institutional investors who use it for hedging or for speculative activities. However, with time, we have seen a steep augmentation in the per capita income of an average Indian. Consequently, the appetite for investment in alternative instruments has transcended into the need to explore untested territories, and one of the most lucrative of all the available options, is the derivatives. Taxation Of Derivatives: Let's have a sharp overview of how taxability impacts the dealings in futures and options: Futures: Since, there is no transfer or delivery of the underlying asset in case of futures, the income or loss from it cannot be taxed under the head "capital gains". Therefore, depending upon the fact whether the assessee is a trader or an investor, the head of income...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now