Things That You Should Know Before Investing In Stock Market


Investment in Stock Market

Are you looking to invest your money in stock market? If you are going to invest some amount in the shares, you should check the following things before making investment because investment is stock market are subject to market risks. The last few days have seen a steep decline in share market due to the corona virus and concerns arising from it. Currently, share prices have plummeted and there is panic among investors. Such incidents in the past have proved attractive for long-term equity investment. Such an opportunity comes once in a decade.

The last time investors got such an opportunity was in 2008 and 2001. Investors from three to five years can get higher than expected gains from Indian stocks. Remember, whenever the market goes through a bad phase the impact of the news is extremely negative and no one can predict what will happen next. It is known only after going into the past.

Even the debt market currently looks attractive and at the same time presents an interesting investment opportunity. The reason for this is the spread of good credit. Therefore, here too we have a good opportunity to invest in corporate paper once in a decade and this time in equity.

According to our equity valuation index (published in the factsheet), the market is in oversold territory and is now indicating that the time has come to invest in equities. We believe the market is likely to improve on the corona virus. The market will begin to improve as soon as you get good news on the corona virus. The factor that hinders this assumption is that the market currently has no information about the lockdown beyond the 21-day period. Also, we do not know how long the corona virus will last. Disruptions have arisen on both supply and demand, so there is a possibility of a slowdown in the near future. Corporate India will also be reeling under the Corona epidemic and its impact will be reflected in the coming quarters. The market does not see any upside in the near future.

The lesson learned from the recession of 2008-2009 is that when income is cut, there is nothing to worry about, as the market will take a forward turn. You have to remember that the share prices have improved by 30-40 percent. Therefore, there is no justification for paying attention to income, when such huge improvements in share prices are being seen. Before the outbreak of the epidemic, the Indian market was highly valued. Therefore, we were advising investors to opt for dynamic asset allocation products and debt plans. There is hardly any pressure to redeem the shares.

We think Indian investors have matured a lot since the last crisis seen in 2008. We are shopping for this improvement. All sectors have improved significantly and are currently below the 2008 valuation level. We believe this is a good opportunity to buy for once in a decade at such a cheap valuation. Volatility is a part of investment in equity. This improvement in the market will be the first of its kind experience for those investors who have entered the market in the last few years. However, if these investors remain in the uncertainty of the present round, then we believe that such investors will get the opportunity to earn more than expected in the coming years. Date is a good option.

Historically, it has been observed that whenever the market improves, those investors who remain invested during the upsurge benefit faster. We believe that the debt markets are currently at a good price from a short to medium term perspective. Investors should invest in debt ie debt to get maximum benefit from the profit. Conservative or traditional investors may consider investing in short, short and medium term loan products. Investors with high risk potential may consider investing in acrylic funds as repo is the most attractive.

Recently, the entire assessment has become attractive after correction. There are good prospects in the metal, mining, telecom and power sectors, while there is scope for improvement in the consumer, non-durables, auto and banking sectors. Valuation in banking — public and public sector undertakings — has improved significantly. We have always been selectively positive on topics such as corporate lending banks, good liability franchises and customer focused non lending franchises. We have improved select banks that have good Asset Liability Management, high CASA and comprehensive financial services presence. We are confident that NBFCs will continue to see a slowdown in credit growth due to the tight credit market. But we are positive on select gold financiers and insurance, who could benefit from India's long-term structural growth.

The average flow in SIPs has been more than Rs. 8,200 crore for the last 12 months. We believe this trend is likely to continue, as SIP is emerging as the preferred route for retail investors to invest in mutual funds. Historically, it has been observed that any global event which has caused a slowdown in the market has proved to be an attractive investment opportunity. At such times it is important to keep up with the current investment.

Given the current market situation, investors should top-up their existing SIPs and other investments made in mutual funds, as there is now an opportunity to accumulate more units at relatively lower prices. Uncertainty creates market volatility. Therefore, invest in those products that can benefit the most from market volatility. Opt for Asset Allocation or Balanced Advantage Fund and also avoid investing in debt. Debt markets are also offering attractive investment opportunities.

Hence, this article about the investment in stock market ends here. For more investment, insurance and technical information related articles, you can check our web portal on the regular basis.

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