Want peace of mind? - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Want peace of mind?

Apr 7, 2005

Though the indices gained quite nicely yesterday, they are really at the same levels from where they set off at the start of the week. In effect, the markets are moving in a narrow range, gaining in one session and losing in the other. While this may be frustrating for investors who had gotten used to seeing their portfolio gain, week after week, it may be a sign of investor sentiment slowly maturing.We have maintained steadfast that a correction is healthy for the investor from two perspectives. One, it acts as a reality check, avoiding a heady bull phase (like in 1992 and 2000) and the pain post that. It is a healthy sign, as it is foolish to assume that indices will keep going up and only up. Secondly, a correction helps investors re-assess their risk-return matrix and allows new investors, who had missed the bus earlier, to try and make an entry, thus adding to the depth.

Foreign Institutional Investors (FIIs) continue to be the key drivers of the Indian or rather the emerging stock markets. And that trend is likely to continue in the foreseeable future, despite the thrust on retail participation. But with equities enjoying 3 way tax benefits (tax free dividend, longer term capital gains is zero, as well as freedom to choose a tax saving mutual fund - ELSS, within the Rs 1 lakh ambit), it has become really a very attractive and viable investment instrument. In effect, the movement has been forward looking, aiming to build an equity culture in the country.

Our view still remains the same. We continue to have confidence in a larger part of India Inc. to grow consistently. Though an 8% GDP growth looks some time away, our usual 6% growth does not look too bad. Of course, that does not mean that India should not strive to break this and enter a higher growth orbit.

If we look around, we increasingly see a lot of new entrants, both local as well as foreign, offering new ideas, services and products to the Indian consumer. It underlines the potential they see in the Indian economy. We sure have a long way to go, and our progress is not without blushes, but then either you look at the glass as half empty or half full. We prefer half full!

In this light, we say that the Indian indices are likely to see newer highs. Whether its today, or a month or a year or years down the line that we do not comprehend. Not much of prediction is it! But then if you are not looking to time the markets and are looking at a investment avenue that beats inflation and most other investment avenues in terms of returns, then look at investing slowly but surely in quality companies' backed by fundamental strengths. And stick with your investment for a longer horizon for it does not help you, if you continually enter and exit (it only fattens your broker's purse and gives you tax worries). In the end, most likely, the strategy will result in peace of mind, more hair on your head and give you a clear perspective and control over where your financial goals are headed.

Equitymaster requests your view! Post a comment on "Want peace of mind?". Click here!

  

More Views on News

The Top 6 Artificial Intelligence Plays in India (Views On News)

Dec 6, 2021

Investors looking to tap into AI theme need to keep an eye on tech firm leveraging the power of AI are making things possible.

6 Penny Stocks that Rallied 1,000%+ in One Year (Views On News)

Dec 6, 2021

These penny stocks shed their penny status by surging 1,000% or more in the last one year.

6 Popular Stocks that Turned into Penny Stocks (Views On News)

Nov 27, 2021

A look at popular stocks that crashed big time and never recovered, i.e. which went from 'Multibaggers to Multibeggers'.

Will the Omicron Variant Scare Put the Spotlights Once Again on Gold in 2022? (Outside View)

Dec 8, 2021

Rounaq Neroy against the backdrop of the virulent Omicron variant explains what are the factors that would put the spotlights once again on gold.

Will Your Monopoly Stock Rise or Fall? (Profit Hunter)

Dec 8, 2021

Not every monopoly thrives forever. On the contrary, many go downhill or even fail.

More Views on News

Most Popular

Infosys vs TCS: Which is Better? (Views On News)

Nov 26, 2021

In the post pandemic era, the top two IT companies in India are fighting to capture the growing demand for IT.

6 Popular Stocks that Turned into Penny Stocks (Views On News)

Nov 27, 2021

A look at popular stocks that crashed big time and never recovered, i.e. which went from 'Multibaggers to Multibeggers'.

India's Top 5 Monopoly Stocks to Watch Out for (Views On News)

Nov 30, 2021

These 5 companies dominate their sectors with a huge piece of the pie.

6 Penny Stocks that Rallied 1,000%+ in One Year (Views On News)

Dec 6, 2021

These penny stocks shed their penny status by surging 1,000% or more in the last one year.

The Biggest Winners and Losers in India's Transition to Electric Vehicles (Profit Hunter)

Nov 26, 2021

How India's EV transition could be a major headwind for the incumbents.

More

Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

S&P BSE SENSEX


Dec 8, 2021 01:09 PM

MARKET STATS