Breakdown on sectors impacting the overall markets in November

November was always supposed to be a tumultuous month for markets considering US elections and Fed rate outlook. However, the demonetization drive actually spooked the Nifty. Of course, FII selling also played its part in depressing prices during the month. Here is a low-down on sectors impacting the overall markets in November…. Continue reading

Valuation questions.

What every Indian investor needs to ask…

After touching a peak of 9122 in March 2015, the Nifty has drifted in a range of 1000 points. Typically, any move closer to the 8000 level has attracted buying support and any move closer to the 9000 mark has attracted selling. It is time to ask a pertinent question. Are current valuations for Indian markets justified? Or are we thriving on hope? Continue reading

Tackling volatility

What should be your strategy in these volatile markets…?

The market index, like it happens so often, does not tell the whole story. From its peak, immediately after the Union Budget, the Nifty has corrected close to 13%. But, scratch the surface and the real story starts unfolding. You have companies like Sun Pharma, Lupin, and Asian Paints that have corrected over 20% during the same period. Private Banks have been through a similar ordeal. I am not even talking about PSU banks, which have lost half of their value. What does this mean for investors and how to approach markets? Continue reading

Why did Nifty crack?  Remember, a rich market always keeps stumbling…

After almost getting within striking distance of their all-time highs, the Nifty and Sensex fell vertically over the last 3 trading days of the week. Why exactly did they fall so rapidly and what were the triggers? There are 4 such triggers!

It is all about the ETFs…

Exchange Traded Funds (ETFs) are powerful global passive investors. Passive in the sense, they don’t bother about outperforming stocks, and specific stock performances. They just buy the index if they like a particular market. Since the beginning of March 2015, over 85% of the money that came in was in the form of passive ETF money. Just as the ETF buys all stocks in the index in the ratio, it does the same when selling. These ETFs are typically driven by news and valuations. Not surprisingly, they hit the 2 high/PE sectors viz. Pharma and Technology. To combine with rich valuations there was cross currency risk. Continue reading

Use futures trading intelligently

A successful self trader – Rule # 2

Warren Buffet may have referred to Futures as weapons of mass destruction. But there is a method in the madness. While you can get away with mistakes in the cash market, your margin for error in futures is limited. But it has some amazing advantages. It combines the best of leverage, economy and efficiency. Futures manage your risk and also spur your investment yield. But Discipline is the key!

FROM THE EDITOR’S DESK

Imagine you have bought futures of Infosys expecting a bumper quarterly result. The profits were on course but the guidance turns out to be an absolute disaster (Oh yes, don’t we remember April 2003?). Most likely you are up against a huge MTM loss and a possible wipe out of your capital. That is where intelligent futures trading and the power of discipline come in handy. Continue reading

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