The past 4 years from the phenomenal crash of May 2004, had witnessed unprecedented gains for the Indian Equity scenario. Stocks which sold for Rs.50/ and Rs.60/ four years ago , rose to such dizzying heights as Rs.2000/ and Rs.4000/, trading almost 400-500 times. The strange fact here is that nobody , nobody really , had the foresight or vision to buy and hold stocks for 4 years at a stretch. At the slightest upward trend , most people liquidated their holdings. But these four years gave the savvy traders the opportunity to enter a particular stock several times and exit with handsome profits. But the year 2008 has been so far very unkind to the investors and traders. The International Crude Price which rose from US$60/ a barrel in 2007 to the present US $ 140/ a barrel, changed everything for the worse. With inflation soaring high internationally and in developing countriesl like India, investors and traders sold their positions for fear of losing heavily. FIIs pulled out totally and left the markets in the lurch.
The prospect of the Indian stock market recovering, which fell from the dizzying height of 23000 (BSE Sensex) to the present 14000-15000 levels, in a matter of about 5 months, looks rather bleak All IPOs in the recent past have been non-starters. The traded volumes in the Indian stock market has reached abysmal lows. With the crude price slated to test new highs according to the experts, the future too looks rather dismal.
Now what does the average investor do? Is it time to book losses? Is it time to stay completely away from the market? These are the cardinal question that the pundits are struggling hard to find answers to.
But amongst all this pandemonium, let us try to stick to the fundamentals of investing in the stock market.
Never,ever, invest in a stock on hearsay and rumour. Invest in a stock after looking at its fundamentals. Once invested stay invested until your target profit is achieved. Never try to average in case of a fall. Never speculate. Invest intelligently. You shall stay afloat in this sea of sinking investors.
PKP Iyer
Article Source: http://EzineArticles.com/?expert=Pkp_Iyer