Near the bottom of bear markets, broad buy signals are generated by several rules-of-thumb. Those check out positive. The first buy signal is that the earnings yield is higher than the yield from risk-free instruments.
Stick to disciplined investing. Do your homework thoroughly before committing your funds or you will be speculating. This is not advisable on both counts of managing risk and enhancing returns. Preferably, add companies that are leaders in their respective businesses. The companies should have reasonably decent prospects, sound management and strong entry barriers, apart from healthy financials that will help them tide the current rough patch.
Keep a war chest ready to take advantage of the likely dips till the general elections.
There are of course, other ways to win elections including intimidation of voters, gerrymandering, fiddling electoral rolls, booth-capturing and other creative forms of rigging.
The declining sugarcane acreage and the resultant lower sugar output may be supportive of firm sugar prices. However, there are other reasons that suggest that the sugar pill may not be as sweet as it seems.
With interest rates creeping up, it is time for investors to be wary of companies burdened with debt and high working capital needs.
Look for companies whose earnings growth may not be great, but they are relatively debt-free.
When supply exceeds demand in a liquid market, prices drop until demand matches supply.
The sharp downward swing in market sentiment in the past six months has rendered stock valuations attractive. Here are some stocks experts say will deliver handsome returns.
A cynical and realistic investor may be able to profit from that. You would have to read the signals carefully and time the exit perfectly.
An average investor who has stayed committed to equity thus far should now be averaging down and buying on every dip rather than selling
Serious money will only come in if there is a fall of another 5-10 per cent, or the market stays in the current price band for the next 6 to 8 months.
The bulls are faced with tough times, thanks to concerns pertaining to high inflation, rising input costs and earnings deceleration among other factors.
Pick two strongly related stocks with a constant price differential and then, trade in them when the differential changes.
The best performing industries of the past two years have included power, engineering, construction, capital goods, telecom, etc. Broadly, these are infrastructure-related industries that have seen strong, even geometric growth. These are also, by and large, not industries that receive very high discounts globally. In India however, they have been treated as growth sectors that deservedly, receive growth industry discounts.
Derivative users are likely to be much more aware of the risks, which would lead to safer investments. It seems many treasuries entered derivatives without attempting to understand the basics. CFOs have embroiled themselves in complicated scenarios of barrier options & cross-currency swaps without trying to understand the nuts-and bolts implications. Currency swaps enable users to shop for the lowest interest rates. Barrier options are cheaper than standard forward contracts.
Commodity markets have been out- of-sync and moved up as other assets depreciated. What's more, this is true for several ranges of commodities. Crude and other fuel sources have hit successive record levels.
The robust GDP growth rate experienced by the country in the last few years is indeed commendable and was aided by investment in infrastructure. To sustain growth rates, it is imperative for India to make higher investments towards setting up world-class infrastructure.
Banking and IT are the two sectors where you can make money by reverse trades. That is, buy one, sell the other and profit from the widening differential.
In the next two years, invest in leading companies in key sectors and buy more when prices fall further.
