Current Stock Market scenario and your response as investor.
1. It's an unprecedented fall irrespective of index stock or mid cap or small cap.
2. Time has come to review your portfolio and restrict your holding to 6 to 8 sectors and 15 to 20 stocks with the advice of your Financial Advisor
3. Value of portfolio of the majority of the investors have eroded by 40%.
4. Don't panic, do you need this money to spend now for immediate consumption? Definitely not.
5.Stock prices are below their intrinsic value and cheap.Some stocks are fundamentally strong and point of reversal is imminent.
6. Look out for ZERO debt securities with good governance, no pledge by promoters, when you recast your portfolio.
7. You can invest at least 30% to 40 % depending upon your Risk Appetite at this juncture. Even if another downfall occurs sanity is bound to return.
8. India has voluntarily gone for many structural changes like Demonetization,GST ,IBC RERA etc. and hence it has hit our GDP number. But the foundation is solid for take off.
9. With good harvest of Rabi Crop rural spending will pick up plus government is expected to come out with some rescue package to boost spending.
10. Do your research, look out for good companies in Pharma , FMCG ,Cement and Banking/NBFC.
11. FPI's who had redemption pressure have taken exit from Emerging Markets and they are bound to return value stocks
12. No asset class be it, Gold Fixed Income or Real Estate can fetch you the returns. Interest rates are heading downwards. Cheap interest rates are bound to push Capital expenditure. Equity can offer you in coming two to three years.
HAPPY INVESTING IN THE NEW YEAR.
P V Bhagwat Investment Guidance Cell Committee
Lokmanya Seva Sangh , Parle.
