The good times continued for fund investors as equity markets closed in positive terrain for the third week in a row.
The markets are once again in a bear hug and the Sensex at 1400 hrs is down 133 points at 8,930.
Volatility in April continued from where it signed off in March. The specter of rising interest rates and climbing oil prices dealt a double whammy to the stock markets.
The markets after seeing some volatility in the past few weeks, took a definite direction this weekÂ…downwards!
Investors can now put up to Rs 100,000 in tax-saving funds.
If markets correct further, risk-taking investors should use this opportunity to increase their allocations to equity/balanced funds. Investors who have taken the SIP route, will stand to benefit from falling markets in any case.
Is this year's budget going to encourage savings and investments or is it going to act as a dampener?
January 2005 was clearly a testing month for most investors; however, such times can often demarcate serious long-term investors from those who are looking to make a quick buck.
Investors with a low to moderate risk profile can consider SIPs in balanced funds. \n\n
Our advice: exercise caution and don't get carried away by the exuberance in the markets. \n\n\n\n
Finally, the Sensex touched 12,000 mark for the first time since April 20 in late trade but could not sustain it.
While picking a quality mutual fund is never easy, rising markets often make the task seem a lot easier. Exercise a greater degree of caution, because tough times can and do separate the men from the boys.
Dividends from equity funds would continue to be tax-free in the hands of investors those from debt funds would be taxed at 12.5% plus 2% surcharge.
An investor friendly budget would mean further incentives and opportunities for investors to get invested.
Yet again an industry expert stresses on the need to stay invested over the long-term and not look for quick gains.
It may not be a smooth sail at the markets in the immediate future but then equity investing is about taking bets over the long term.
A note for retail investors: If you are a long-term guy, you should not panic. Long-term investors never panic.
Analysts say there is still no visibility of earnings improvement.
Elections and exit polls continued to set the tone for markets, for a better part of the week ended May 8.
Oil, banks eneded the day in green while few in auto sector lost heavily.
Our advice to investors as markets inch upwards is that investments in equities should be made cautiously and with a defined, 3-5 year time frame.
Investors can now invest in mutual fund schemes which invest globally thereby giving investors access to international assets.
After lying low for a while markets came back strongly and breached the 6,000 points mark. The BSE Sensex posted a growth of 3.91 per cent to close at 6,012 points while the S&P CNX Nifty rose by 4.36 per cent to end at 1,914
MIPs are best suited for investors who are risk-averse and would like to have a tiny component of equity in their holdings purely to boost their returns.
The finance minister gave a reason to cheer to mutual fund investors last week. After the announcement of the Budget, the stock markets rose sharply.
Industry experts stress on the virtues of long term investing in equity markets and professional assistance.
It was yet another dull week at the debt markets and the sentiment continued to be negative.
Good times for mutual fund investors are continuing.
The much-anticipated correction in the market seems to have finally set in.
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