Antonym wrote:@Leon: I have not researched any of your counters and cannot advise you specifically on these... In general, my advice would be based on your investment horizon and present market prices.
If you are willing to hold for more than a year, most shares are likely to yield more than what a bank fixed deposit does.
Even if I have a investment horizon shorter than 1 year, and do not need cash immediately, I would not sell yet. Prices might or might not decline, but - from these depressed levels - the probability of a 20% increase is greater than the probability of a 20% decline.
While endorsing most of Antonym has said, I don't think changing stocks will be helpful, as we don't know what stocks will move next or what will fall or when market will bottom out, etc. As Anto said we are now closer to the bottom than the peak, in other words more chances for market to turn. But when?
My opinion is now time is right for the market to turn reacting to some trigger. But what market doesn't have is confidence and courage. Then we have lost TRUST also due to some shady deals. Regulators are tending to make rules to prevent similar incidence occurring again, rather than punishing the culprits (they don’t have courage). If you punish one guy others will fear. If you make a new rule, they will find new ways to creep in.
I would like to suggest you to two options.
1. Trade some of your holding, ie : if you have 4000 shares sell 1000 on a good day and wait for a bad day and buy what you sold. Gradually increase your trading quantities to about 25% of your portfolio.
2. Market is full of opportunities now. 75% of the shares can give impressive returns. And most of the stocks are now affordable and worth. Even a person who can set aside Rs.10, 000/- also do have very attractive options. Be innovative. Select a certain stock and start a fresh investment. Don't spend 10,000 on the same day. Go on slab basis. Place your next buying point fairly lower. If the share you invest has gone up with reasonable profit and without sustainable market momentum, book the profit.
Some people say they are waiting for the market bottom. Remember once it turned you can’t buy. Look at order books. Throughout last one month selling side is weak. But nobody goes up and buy. Once market got changed no one want to sell.
ie : Today afternoon. It was a rush. In the morning Reef.W0019 was available @ 2.50, but in evening no one is selling even at 3/-. Return is 20%. Greg.W3 from 3.50 to 4.10. Greg.N 11.40 to 12.00.
Some guys are waiting for big turnovers. Day before yesterday we had a considerable turnover. 673M, which equals to 1.8B if we value the stocks at 5 months back prices. So look at quantities also. Even big guys are poor than they were.
Why I expressed my views in bit detail? I WANT TO SALUTE FOR YOUR COURAGE, FOR HOLDING YOUR STOCKS THROUGH OUT THE MOST DIFFICULT PERIOD IN CSE AND FOR YOUR COMMITMENT TO BE IN THE MARKET IN THE FUTURE.
I am in CSE since 1996, In the long run stocks are giving considerable returns than the fixed income instruments. That’s proven even during war time!
Best of luck!