13 Jul 08 Investing in the Indian Stock Market
I’m sure the numero uno question in the minds of Indian investors at the moment is “Is this the right time to start Investing in the Stock Market”? It’s important that investors understand the fact that its impossible to predict tops and bottoms of stock markets. Investors looking to invest at market bottoms will always be disappoinbted since they will invariably miss the bottom and ensuing bull rally. History stands testimony to the fact that no investor has ever managed to pick bottoms on a consistent basis. Hence, the best startegy would be to pick fundamentally good stocks and start accumulating at every fall. Thus due to the rupee cost averaging benefit investors would be able to average down during a fall in the stock markets enabling them to keep their average cost of acquisition, low.
19 Sep 07 Rakesh Jhunjhunwala’s view on Investing in the Stock Market at an all time high
The Indian stock markets have hit another new all time high. The 16000 peak has finally been successfully scaled. Investing in the stock market won’t be easy from here on. Rakesh Jhunjhunwala came on TV today and gave his piece of advise to investors. He said Indian stock market has exellent potential but investors should not expect to get the kind of returns that they have got in the last 3 years. The Indian stock market has quadripiled with SENSEX going from 4000 to 16000 in the last 3 years. However, Rakesh Jhunjhunwala says a similar return cannot be expectued from here on adding that he doesn’t see the sensex near 64000, atleast not during his lifetime. From here on there would be stock specific rallies and hence investors investing in the stock markets need to pay more attention to the kind of stocks that they pick. The quality of portfolio will matter a lot. I feel retail, capital goods and construction sectors are looking good at the moment.
08 Jul 07 Right Time for Investing in the Stock Market? SENSEX to cross 50000 mark by 2020!
Nifty and Sensex touched all-time highs last week. Indian companies are rushing in to tap the capital markets and raise funds. The price of crude is rising. Interest rates have risen tremendously. Looking at the various macro economic indicators, one wonders if this is the right time for investing in the stock market. Will there be enough liquidity in the system to lap up the new public issues? Do rising crude prices and rising interest rates signal the end of the bull run? No, says Morgan Stanley.
Morgan Stanley believes SENSEX will touch 50,000 by 2020. Most people would laugh this out. At the moment a target of 50000 for the sensex seems impossible. I had the same feeling a few years back when I saw an interview of Rakesh Jhunjhunwala on CNBC predicting a target of 12000-15000 for the SENSEX when the SENSEX was below 6000. Everybody including the anchor of the show laughed it out thinking Jhunjhunwala was just trying to be humourous. But he wasn’t. He was damn serious. Last week the SENSEX reached his target of 15000. When SENSEX first hit the 12000 mark, Jhunjhunwala revised his target to 25000. Now Morgan Stanley has indicated a target of 50000 for the SENSEX. If Indian companies continue to grow at the pace they are presently growing at, SENSEX will cross 50000 much sooner than 2020. My top 3 picks continue to remain
- Larsen & Toubro
- BHEL (and)
- IVRCL Infrastructures
14 Jun 07 How to apply in an IPO
This post is based on the request of one of the regular readers of this blog. For the past 2 – 3 years there has been a huge bull rally in the indian stock markets which has brought people back to investing in the stock market. A fallout of this capital market bull rally is the tremendous increase in the activity taking place in the primary market (IPO market). Companies are rushing in to tap the capital markets and raise funds through Initial Public Offers (IPO) and Follow onpublic offers (FPO). Though paper work has been considerably reduced, the process of applying in an IPO is still little complicated for people not familiar with investing in the stock market. Here are simple steps to start investing in stock market and IPO’s (primary market)
There are two ways to invest in IPO’s
Online mode
Offline mode
Investing in IPO’s online (through the internet)
This is the simpler of the two methods. To get started in investing in IPO’s you will need to open a demat account cum trading account (To do this you will need a bank account and a PAN number). After opening your demat and trading accounts you will need to login through your trading account and select the IPO you wish to invest in. Transfer funds from your bank account to your trading account. Select the number of shares you want to apply for and the price at which you want to bid for (or use cut off option). If you get the shares allotment, the shares will be credited to your demat account. The IPO refund will be sent by cheque to your postal address or through ECS to your bank account.
Investing in IPO’s offline
Here you will need only the demat account. Trading account is not necessary unless you decide to sell the shares you have been allotted through IPO’s. You will have to visit your nearest broker and get the IPO application form, fill it up and give the filled form along with the cheque to the broker. You will be given an acknowledgement form. If you apply for more than Rs. 50,000 you will need to attach a photocopy of your PAN card with the IPO application form.
Online or offline : Which method should I choose?
It depends. Online mode is more convenient and saves time, effort maybe money too (if you consider fuel cost). But you won’t be able to give a stop payment if you decide to change your mind after applying. If you are doubtful about investing in an IPO, its always better to use the offline mode to invest in that IPO.
03 Jun 07 Online Stock Market Trading in India
Based on my experience, here is a list of some of the best brokerage houses offering facilities for Online Stock Market Trading in India. Online Stock Market Trading has evolved tremendously in India, in the last five years. It is very convenient, comfortable and cost effective way of trading in the stock market. Feel free to share your experiences through comments
Rank 1 : Reliance Money
Rank 2 : Geojit
Rank 3 : Sharekhan
Rank 4 : Kotak Securities
Rank 5 : ICICI Direct
P.S. – I haven’t taken into account the performance / accuracy of equity research and the trading calls that some of these brokerage firms provide for free. I’ve only taken into account safety, brokerage rates and speed of execution. I’ve taken into account only the Online Stock Market Trading facility offered by the above brokerage firms. I haven’t considered their Offline Stock Market Trading facilities.
However, for investing in IPO’s I feel sharekhan is the best, since it allows clients to place orders till 2-3 PM on the final day of subscription of IPO’s.
Disclaimer : This is only my personal opinion. It shouldn’t be considered as a recommendation. Please do your own research before selecting your broker for Online Stock Market Trading.
31 May 07 Nifty at ALL TIME HIGH
In a remarkable coincidence, the NIFTY and the DOW JONES hit all time highs today in the midst of a strong global bull run. Markets opened gap up today and were range bound with a downward bias for most part of the day. Suddenly, in the last 1 hour of trading, there was a sudden spike (the 2.30 effect?). Markets are likely to open gap up again tomorrow. Looks like this is a good time for investing in the stock market, globally. However, there are concerns that the market would not be able to absorb the huge new offerings in the primary market.
22 May 07 Investing in the Stock Market
Recently a few of my friends who read my blog asked me how they could start investing in the Stock Market directly. This article is for those who are looking at investing in the stock market but are not sure how or where to start. Investing in the stock market is fairly simple these days. Given below are 4 easy steps which will have you ready to start investing in the stock market in no time.
- You will need a PAN card to open a demat account which is necessary for investing in the stock market. If you apply online through a credit card you will get the PAN number in about a week.
- You will need to have a bank account for trading in the stock market. A HDFC bank account is recommended. Call the bank and ask them to send a representative to get the formalities done.
- The next account that is a must for investing in the stock market is a demat account. Demat account can be opened with a bank or a brokerage firm
- Finally, you will need an online stock market trading account for investing in the stock market directly.
Tip: Your bank account, online stock market trading account and demat account need to be linked. You can open a online stock market trading account and demat account with the same brokerage firm and give the brokerage firm the power of attorney to operate your demat account so that you are free from paperwork. This will make investing in the stock market a pleasurable experience.
Caveat: Before investing in the stock market one should understand the risks involved or else the entire capital invested can be wiped out in no time.
Apart from investing in the stock market, an investor can also invest in IPO issues by the click of a button, sitting at your home or office desk. Thanks to technology, investing in the stock market is now safe, convenient and easy.
