POSTED BY December 13, 2010 3:41 pm COMMENTS (5)ON
Hello Manish Ji & All Members
I want to know that…
Is our Indian Stock Market is Good for Long Run?
Is it safe to invest In Stock Market ?
Is Future of Stock Market is Good enough ?
Please tell me the answer to the above question asked. Actually, I have invested Rs 2.5 Lakhs in Stock Market(BSE) in the year 2008 which current value of the stock is Rs1.5Lakhs(approx.),As i am a long investor (say 8-12yrs or more ) so i want to know that should i hold stock i had purchased or pulled myself from current market. Actually at begning i didnt have any idea to invest in shares, so i purchased many scripts ( say more than 25 script,Ex- RIL@rs2300 ps , BhartiAirtel@rs450 ps, Ispat@rs70 ps Powergrid@rs133 ps etc.. ) and a big investment in RCOM of 150 shrs @ 700 p/s and its Current value is Rs 128 per shr. Now i dont get any idea what to do.
So please all members tell me your valueble advice which will be benifited for me, now what should i do to avoid losses.
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5 replies on this article “What is the Future of Stock Market As Well As RCOM In Long Run ?”
The biggest mistake investors make are reluctant/aversion to book losses and failure to accept their mistakes that they have made a bad investment decision. First you need to understand that u made wrong decision on two fronts: First on selecting a company with bad fundamentals (both suzlon and Rcom has loads of debts in their balance sheets) and second buying them at steep valuations (i guess @ 2008 peak).
I would rather suggest u book ur losses ,read about stock market fundamentals through some good blogs and books and then start investing in stock markets. Age is still on ur side to make fantastic returns in stock markets.
U can go through the following link to make informed decision in this aspect – https://www.ppfas.com/behavioural-finance/understanding-behavioural-biases/
@ Ramesh ji
What was the reason for buying any of the above stocks? If it was on tips without you knowing any basics about the company, I would recommend selling them (whether the future propects of the company or the behaviour of stocks is very bright / dull / etc). Because you do not know how to evaluate what is the value of the those stocks / companies (the stock price is different than the inherent value of the stock).
Do not wait for getting your price! It may not come anytime or maybe next week (cannot say). There is always an opportunity risk too.
Learn more. Learn continuously.
@ Ramesh Ji
Thanks for you reply but sir i want to know that:-
Is it right for me to book loss of Rs 1 Lakhs as i invested 2.5Lakhs in 2007-8 and now its CMV is 1.5 Lakhs?
Is it right to buy more share of RCOM to average my old ones ? As i had purchased RCOM of 150 shrs @ 700 p/s and its Current value is Rs 128 per shr. Now i dont get any idea what to do.
Please give yours valuable suggestion ?
If you know how to read balance sheets (including the footnotes) and do read them, analyse companies on various parameters, etc then and then only you should be dealing in individual stocks. Otherwise, a strict NO.
My parameters of “good” and “safe” maybe quite different than yours! The future is unpredictable. period. There is a possibility that Indian stock market can behave like Japan (almost nowhere over a period of last 20 years, point-to-point) or like US (almost same point-to-point over last 10 years) or can behave like US (from 1982-2000), a mind-boggling spectacular secular bull-run. Or somewhere in between. Take your pick!
My advice to you will be to get out of individual stock holdings of yours, learn about investing and “how and why to invest”, etc. Convert your stock holdings to 2-3 diversified MFs.
And keep learning!