Friday, October 3, 2008

Where to Invest and where not to?

The current market trend is giving shudders to investors all across the country, as they are finding it tough to pick on the sectors that offer the safest bet. With the volatility in the market still in continuance, investors are cutting short of their expectations. Not only this, with the slump in the market, even the institutional investors are seen running after profits in short intervals.

The recent records show that not many sectors promised to pay returns to the investors as were expected. Most sectors are reeling under severe pressure to sell their shares on a rotational basis. In this scenario, it is advisable for the investors to pool their money with caution, taking into account a broad overview of sectoral perspective in their mind. But this strategy will prove beneficial only when the investor is considering to invest for a horizon of at least 2-3 years. It is not sure that the selected sectors will provide only aggressive returns as there is every possibility of some sectors proving defensive in nature. But a mix and match of these sectors will be in the interest of the investors as it would help them in beating index returns which are likely to be flat in the next 6-9 months.


One of the adversely affected sector in the recent global scenario is technology, but the rally of the dollar and a huge support proposed by the US government for stabilizing the financial crisis has in turn shortened the recovery process for this sector which was reeling under a severe slump. Now, most players in this sector are looking forward towards rationalization of expenses and manpower strength as this will in turn prove beneficial for the tech companies to regain their lost status in the market. Stocks which were earlier being priced in negative terms are now showing an upward movement in the range of 10-15 percent which is good for traders.


Another sector close to heels is the banking sector as it is in news for offering long term picks to the investors. A combination of well managed private banks and fundamentally good PSU bank stocks is what the investors must opt for. There is every hope that the domestic market will improve in the next one year offering the investors several opportunities to buy the stocks at regular intervals, provided the investors possess liquidity to make use of these forthcoming opportunities.

4 comments:

Hassan Abbas said...

I agree -although stock world wide are at a low level,yet I would not touch these unless I wanted to forget about the money for two years.

Also even if I were to make this long term investment in stocks I would look for a better opportunity to buy;as I feel stocks still have to go way down after a small rise.Banks,fertiliser and POL for me in Pakistan.
Also for the short term my money is on gold and silver.Thanks for the useful analysis.

Hassan Abbas said...

I agree -although stock world wide are at a low level,yet I would not touch these unless I wanted to forget about the money for two years.

Also even if I were to make this long term investment in stocks I would look for a better opportunity to buy;as I feel stocks still have to go way down after a small rise.Banks,fertiliser and POL for me in Pakistan.
Also for the short term my money is on gold and silver.Thanks for the useful analysis.

Unknown said...

Though the money in the stock market is very fast.. but we're not full secured to put all our money here.. id better to always have your cash at your side.



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Ken said...

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