Skip to main content

How to make money in volatile stock market ?

Tax Saving Mutual Funds Online

Current open Infra Bond Application form

 

The stock markets have been volatile since the last few months mainly due to the uncertainty in the developed markets, especially in the Euro region and concern on domestic growth rate. The inflation rate remains high even after many rounds of monetary policy tightening by the Reserve Bank of India (RBI).

Investors have been left wondering what strategy to adopt and how to tackle the volatility. A volatile market provides good opportunities to create wealth. Let us look at how one should go about for this and what should be his or her strategy.

Don't panic

It is important not to value your investment on a daily basis or at a very short interval. The market prices of investments are bound to go up and down in the very short- term and in short-term too but patience is always rewarded in the medium- to long-term.

Be realistic, and exit

It is important to have realistic expectations while investing in equity-based instruments and book profits once the target is achieved. Investors expecting unrealistic returns often end up investing in high-risk instruments and loose their hard-earned money. Suppose you buy a stock for ~100 and have a target to earn 20 per cent in a year's time. However, if the stock moves up sharply on news or business performance in a shorter time span, don't wait for the year, you may exit and invest the same in a fixed income instrument or a bank fixed deposit.

Limit stocks

Investors should not have too many stocks and instruments in their investment portfolios. Having a limited number of instruments in the portfolio makes it easy to track the performances of the investments and have all relevant information about the investments you have made. Also, it is advisable to invest in defensive stocks such as pharma, fast moving consumer goods (FMCG), information technology and so on.

Asset allocation

It is always better to split the investments between debt and equity based on one's risk capacity.

By doing it that way when the market is down 20 per cent to 30 per cent you have money to buy and rebalance the portfolio instead of not having any money to buy since it is all locked up in equities. Debt while delivering lesser returns gives stability and a peace of mind. This makes investors less irrational whenever there is a crash in the equity market. Equity and debt are usually negatively correlated.

Use SIP

Investing in equities via Systematic Investment Plans (SIP) or Systematic Transfer Plans (STP) is a good strategy. By way of SIP, you invest a fixed amount which starts from ~500 on a periodic basis for a defined time period. If you have a lump-sum but wish to invest that every month systematically, you could opt for an STP where money is debited from a liquid fund in the same fund house and transferred to the equity fund as per the period specified by you. If you are in doubt whether you should enter the market now or not, opt for the SIP route of investment via mutual funds. Ideally SIPs should be subscribed for a longer investment period of say two years or greater than two years.

Tip for Nifty traders

An analysis of S & P CNX Nifty for the last one year from January 27, 2011 to January 25, 2012 has thrown up some interesting facts.

Taking the closing value of Nifty as on January 25, 2012 and the average value of Nifty for the last one year, it was found that the Nifty had closed 132 and 145 times above these two values out of the 249 trading days. This meant that in a bearish market too, the index had given positive returns on more than 50 per cent of the days.

 

---------------------------------------------

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

 

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

 

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

 

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

---------------------------------------------

Application form for Tax Saving Infrastructure Bond and more information

Current open Infra Bond Application form

 

Submit filled up application    Collection canter near you

 

 

 

------------------------------------------------
How to apply to REC Bonds?

Apply for REC Tax Free Bonds forms below

Download REC Tax Free Bond Application Forms

Submit the filled up form to Collection canter near you

Popular posts from this blog

Mutual Fund Review: Religare Tax Plan

Tax Plan is one of the better performing schemes from Religare Asset Management. Existing investors can redeem their investment after three years. But given the scheme's performance, they can continue to stay invested   Given the mandated lock-in period of three years, tax saving schemes give the fund manager the leeway to invest in ideas that may take time to nurture. Religare Tax Plan's investment ideas revolve around 'High Growth', which the fund manager has aimed to achieve by digging out promising stories/businesses in the mid-cap segment. Within the space, consumer staples has been the centre of attention for the last couple of years and can be seen as one of the key reasons for the scheme's outperformance as compared to the broader market. It has, however, tweaked its focus and reduced exposure in midcaps as they were commanding a high premium. The strategy seems to have worked as it returned a 22% gain last year. Religare Tax Plan has outperformed BSE 100...
Read more

Good time to invest in Infrastructure Funds

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   Good time to invest in infrastructure The Sensex has gained almost 10 per cent from May 15 till date, while the CNX Infrastructure Index has gained almost 17 per cent in the period. The price to earnings ( P/ E) ratio of the BSE Sensex is 18.96; for the CNX Infrastructure Index, it is 24.57. The estimated P/ E for next year is 14.04 for the Sensex. Of the 24 companies that make up the CNX Infrastructure Index, six have a P/ E higher than 20. Does this mean infrastructure is fairly valued? Or, has it run up quite a bit? According to experts, barring stray companies, the infra sector is fairly valued and it is a good time to invest. Even if some companies are facing debt restructuring problems, once interest rates come down and regulatory norms become flexible, they will start giving good re...
Read more

Stocks with a high dividend yield

Buy Gold Mutual Funds Invest Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Call 0 94 8300 8300 (India) Stocks with a high-dividend yield can provide investors additional cash flow. More importantly, it is tax-free   With April 2011 just over, the 'earnings season' is well and truly here. This is the time most companies pay out a portion of their profits as dividends to shareholders. Since dividends are tax-free, they are an attractive income source with a select class of investors, who depend on these for additional cash flow. SIGNIFICANCE A company doing well and generating profits will usually be in a position to declare dividends regularly. Hence, a key parameter one should look at whilst investing in a stock is whether the company has a good dividend record. Typically, dividend yield stocks are large-caps and generally not capital-intensive. This is suggestive of the fact that the downside risk on...
Read more

Systematic withdrawal plan

  Start Systematic withdrawal plan Online Although an SWP gives you regular income and saves on taxes in the long term, you cannot open an SWP on a scheme where you have an ongoing SIP   iStockPhoto If you are planning to take a sabbatical from work or are retiring soon, you may be looking at different investment options that give a regular income. Usually, a lump sum is invested to get regular fixed amounts later. Popular products include post office monthly income scheme, Senior Citizens' Savings Scheme and monthly income plans (MIPs). A lesser known option is the systematic withdrawal plan (SWP) in mutual funds. Recently, some funds have even removed the exit load on SWPs if you were to withdraw up to 15-20% in the first year, to encourage people who want to start investing in this instrument. Here is a look at what an SWP is. WHAT IS SWP? Many of us would be familiar with a systematic investment plan (SIP ), where a corpus ...
Read more

UTI Equity Fund Invest Online

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India)   UTI Equity Fund   Invest Online UTI Equity is a large cap-oriented fund with assets under management worth Rs. 2,269 crore (as on June 30, 2013). The fund was originally launched in May 1992 as UTI Mastergain and is benchmarked against S&P BSE 100. A couple of years back the name of the fund was changed to UTI Equity Fund and many of the smaller funds of UTI were merged into this fund. Performance The fund has outperformed its benchmark as well as the equity diversified category average in the last one-, three- and five-year periods. It has repeated the same in 2013 (as on May 31). Since its inception the fund has delivered an impressive 26 per cent compounded annual growth rate which is superior to its benchmark performance in the same period. Y...
Read more
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