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| P R Sundar, Aditya Trading Solutions |
Time: 6.45 pm
When to invest in shares?
Every one who has not invested in shares want to invest in shares.
Everyone who invested in shares want to exit the shares.
This is because of greed and fear.
Those who have not invested want to invest for better gains, (Greed)
Those who invested sitting with loses want to exit (Fear)
If we really want to make good money, when to invest?
Whatever people are talking about shares, I can prove that everything is wrong.
Usually people say 'should not worry about short term fluctuations in market, should stay invested for LONG TERM'
What is long term?
National Stock Exchange started in 1995, with base index of 1000. Assume that somebody invested Rs 1000 in 1995, his investment will be worth appx. Rs 5500 now. Instead if has put the money in Bank FD, his investment will be worth Rs 8000 now.
This is nearly 18 years. Is it not long term?
Somebody took so much pain to calculate the return if one has gone for SIP (Systematic Investment Plan), means investing certain amount of money regularly say every month and he said the return was 1% higher than bank FD rate. Why should a person go through so much trouble just for 1% excess return?
For that one percent, there are lot of other troubles, the calculation is of today, if you want to exit say after two months and if market is down by another 5%, then return will be lower.
So whether it is of long term or SIP, nothing will work in your favour.
You need to time the market.
How to time the market?
A little bit of research will help you.
I am giving here my analysis.
Every asset class has a cycle.
An asset will shoot up like anything, then will crash, then will move sideways for a long time.
Rise, Fall and Consolidation.
This completes one cycle.
For different asset classes, duration of the cycle will be diffrent.
Even for the same asset class, cycle duration will be different in different times.
We will consider only shares here.
Normally the cycle for shares is 10 years with 2 years as margin of error, i.e. 8 to 12 years.
Remember Harshad Mehta scam in 1991, stocks crashed then Dot Com bubble in 2000, again stock crashed, then American Economic Recession in 2008, again stock crashed.
Uniformly just before crash markets have shot up like anything.
Uniformly after every crash markets went for consolidation mode for few years.
So markets will shoot up, then will crash then will go for consolidation mode to complete one cycle which will be around 10 years.
Between Harshad Mehta scam and Dot Com bubble, there were 9 years, similarly between dot com bubble and economic recession, it was 8 years.
So now after crash in 2008 the market is in consolidation mode or sideways mode.
Since 2009, it has been swinging between 4500 and 6200.
Once this consolidation mode ends, markets will shoot up, then will crash then will go for consolidation mode.
This consolidation mode will go on for few more years, then market will shoot up, Nifty will touch 25000, Sensex will touch 1,00,000. Then only crash will come.
If you really want to make money, you have invest at the break out stage, that is when the markets starts moving up.
Until then whoever is investing market will make them to lose their patience. When every investor lose patience and through all the shares and no body has the shares then only market will start the uptrend towards Nifty level 25000.
Whenever people ask me "I have 'so so' shares, when those shares will go up significantly?" my reply always was "after you sell them"
So if you really want invest in shares, do not venture yourself, leave it to the professionals. When I say professionals, I do not mean Mutual Funds. For reasons, please read my article "Stock Market - who make money? Part 2"
I am giving sales talk now.
We manage the portfolio for you, if you are prepared to invest at least Rs 50 Lakhs.
We give two returns, one fixed assured return of 9% and not fixed not assured return which may be between 30 to 40% per annum.
For comments and suggestions:
ashwin95@gmail.com
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