Discount sale on Dalal Street

The once in a year discount sale is now in progress on D-Street. All items are either available on buy one and get one free (if you consider Dec end prices) or up-to 60% off on all items. The sale is on all brands like Reliance, Bharti, Tata, Birla etc. And what can be better than a complete ease of online shopping. Stocks will be directly delivered to your account. No postal charges. Sat and Sun off.

So this summarizes the scene of Indian markets currently. It’s funny that heavens have turned complete upside down is two months. What was considered a heaven for development is now at the brink of complete collapse. With US indexes on respirator and no amount of medication showing any sign, the Indian scene is getting gloomier day by day.

Now is there an opportunity here? Well there is plenty I would say.

Why I’ve been not writing about markets on this blog is because of my un-easiness with the market movements searching for a bottom. As of today I see a 700 points correction taking Sensex to 15K. Here I smell opportunity is a big way. I would suggest one to go all out and invest in small quantities and keep doing so for next 3-4 months. Remember, buy in small quantities.

Another opportunity is for investments for tax purposes. Do invest at the beginning of April in ELSS schemes. I would recommend investing about 25% of what you want to invest in ELSS for the year. One should not time the market is the often repeated verse but now is the time to do so.

I see some more correction happening once the Q4 results are out as financial, auto, real-estate companies are going to perform badly. However, even this is a buy opportunity where one can deploy total of 75% of investment corpus for the year. I would even go to say that give a skip to PPF, FD’s in this scenario and invest in MFs for this year at 15K level and below that.

Now the important question is: When does this discount sale close. My response is let’s not get worried about it as we are investing for at least 3 years and the return will be more than 12% per annum tax-free which is better than most instruments if not all. I believe in investment for compounding and this is a God sent opportunity as you would be investing at much higher prices as the years go by.

Many ask me weather I believe in SIP (systematic investment plan) or not. I would say if you don’t know there are 30 stocks in Sensex then better invest through SIP. Personally there is still time for me to start believing in that. I have not said I don’t believe. J

Stay Cosy!