Market Mantra…..

Friends,

I am back after a long pause. I am sorry; I was not answering your queries from last few months as I was busy in some personal engagements.

We have seen a high volatility session in market in last few months. Equities all over the world have gone up significantly since 9th March 2009. There has been a lot of volatility and correction in the recent months. But still I would say that markets are not crashing like anything, they are holding up.

Question of a million is -> Have the Global Equity Markets bottomed out or is there another crash coming which will lead to re-test of lows for all major markets? The Truth is NOBODY knows it. But prediction is that a final slowdown is still remaining.

The global economy has shown some signs of recovery post March 2009 and the markets have responded accordingly.

In my opinion, under normal circumstances, stock markets behavior depends upon:
• Fundamentals of the Economy
• Fundamentals and Growth of Companies (closely linked with fundamentals of economy)
• Government and Other Political Factors
• Liquidity in the system

The global financial system has been flooded with liquidity post the Lehmann Brothers collapse. The world economies are not strong enough to absorb so much of liquidity. So all the excess liquidity is being absorbed by asset markets. In my views Gold is set to explode again. We may see a Level of INR 18500 per 10 grams in Indian market in December 2009.

I am not giving any levels OR target to achieve in this type of market. What I can tell you best is build a portfolio and then nourish it, churn it.

Suppose you want to invest Rs 10000 in a particular stock then invest Rs 4000 now and then Rs 4000 again and then Rs 2000. So invest INR 10000 in three shots. This will give a opportunity to buy at different levels based on your sentiments with market.