tag:blogger.com,1999:blog-7148222695370746347.post161070102376209743..comments2023-10-15T17:16:24.091+05:30Comments on Stock Market Charts | India Mutual Funds Investment: Is this a good time to take some profits from the stock market?Subhankarhttp://www.blogger.com/profile/13248068905130821262noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-7148222695370746347.post-5311480955189635842010-01-01T08:20:09.314+05:302010-01-01T08:20:09.314+05:30Booking profits too soon is better than hanging on...Booking profits too soon is better than hanging on till the bitter end and face losses. I always prefer to be first-in and first-out.<br /><br />This is where asset allocation becomes important - to decide how much to sell at a time. Selling in small lots during bull markets and buying in small lots during bear markets may work.<br /><br />If you are investing in the index, there is no harm in putting in a regular sum of money each month - using cost-averaging or value-averaging principles.Subhankarhttps://www.blogger.com/profile/13248068905130821262noreply@blogger.comtag:blogger.com,1999:blog-7148222695370746347.post-4338711191228838562009-12-31T23:38:43.964+05:302009-12-31T23:38:43.964+05:30Having invested in the FTSE in 2009 I started prof...Having invested in the FTSE in 2009 I started profit taking from November so did reasonably well for the year, although I have missed out on the last few percent gains at the year end. In hindsight I should perhaps not have almost fully withdrawn from the FTSE, as of course a correction may not occur for some time, and entering again at this point is not ideal. Experience being everything, in future I would probably remain partially invested until after a clear downturn demanded total withdrawal. However, in the position I am in now, holding cash and little in the FTSE, what would you suggest? Slowly re-enter in stages, or wait for a clear signal that the bull market is continuing and invest a larger sum, or wait for a correction? My instinct says the first opion, but I would value your opinion.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7148222695370746347.post-43074436364420718042009-12-31T19:34:24.685+05:302009-12-31T19:34:24.685+05:30Your query on Nifty P/Es seems to have fallen thro...Your query on Nifty P/Es seems to have fallen through the cracks, Jasi. Can't remember on which post you had commented. Getting old and forgetful.<br /><br />Market valuations change if the earnings improve for the index stocks. Don't bother too much about Sensex or Nifty P/Es, unless you invest in index funds or index futures.<br /><br />For me, it is all about valuations of individual stocks.Subhankarhttps://www.blogger.com/profile/13248068905130821262noreply@blogger.comtag:blogger.com,1999:blog-7148222695370746347.post-89587465125045534872009-12-31T18:33:01.099+05:302009-12-31T18:33:01.099+05:30@Sanjeev, very interesting analysis. Thanks!
@Subh...@Sanjeev, very interesting analysis. Thanks!<br />@Subhankar sir, I had actually asked a similar ques in one of your posts recently regarding the usage of Nifty PEs for basing investment decisions. For me though the jury is still out :)<br /><br />Which brings me to a question, what tools do you use to figure out market valuations? Do you also rely on market PE?<br />Other than a correction, are there other factors that can change market valuations?<br /><br />Oh and thanks for this interesting post! :)Jasihttps://www.blogger.com/profile/14267764047614537730noreply@blogger.comtag:blogger.com,1999:blog-7148222695370746347.post-62176020763444507182009-12-30T14:38:45.371+05:302009-12-30T14:38:45.371+05:30@TV: Thanks for your comments.
If anyone had ente...@TV: Thanks for your comments.<br /><br />If anyone had entered between Feb and Oct '08 and exited during Aug-Sep '09, he may have broken even or made small profits.<br /><br />Getting out of the market completely in the hope of a deep correction is unwise. Timing the market is not easy. I find it easier to book partial profits, and stay invested as per my asset allocation.<br /><br />For new entrants, the time to enter is when you have money to spare - after exhausting PF/PPF, PO MIS/Bank FD options that protects the principal.<br /><br />@Sanjeev: Appreciate your comments and thanks for sharing some interesting facts about the Nifty.<br /><br />The figures show that taking partial profits and staying invested enables investors to benefit two ways - having some ready cash if the prices fall, and riding profits should the market move up further.<br /><br />As a general thumb rule, enter when a stock or index P/E is trading below 15 and start to book profits when the P/E crosses 21. Such programmed systems don't always work, but it is better to have a system that works more than 51% of the time, than to leave everything to chance and destiny!Subhankarhttps://www.blogger.com/profile/13248068905130821262noreply@blogger.comtag:blogger.com,1999:blog-7148222695370746347.post-628021812376803242009-12-30T09:40:35.674+05:302009-12-30T09:40:35.674+05:30Dear Subhankar Ji,
Nice post as always. Just wan...Dear Subhankar Ji,<br /><br />Nice post as always. Just wanted to add my two bits. I was doing some reserach recently regarding historical PE valuations for nifty. It might interest you that in 2177 days of trading (1.4.2001 - 24 dec 2009), The nifty PE low and high has been 10.68 & 28.29. Further, current nifty PE is 23.11 as on 29.12.2009. Historically, nifty has traded above 23 for <b>ONLY 81 days</b> out of these 2177 days i.e. only 3.72% days. Strong case for partial booking of profits and sitting on cash. It would just make much more sense to book profits, even if partial, because if market is correcting, most of the stocks will correct or will be under pressure, no matter how good fundamentally or technically. A 20% down move will bring nifty down to 18.4 levels. Again nifty has traded between 18 and 23 band for 841 days i.e. about 39% of times, certainly more comforting. Incidentally, this is also a tad above long term average PE of 17.2. My ideal, however, would be entering ard 15.<br /><br />Thanks. You are making all of us much better investors.<br /><br />Sanjeev BhatiaSanjeev Bhatiahttps://www.blogger.com/profile/02857848132500280952noreply@blogger.comtag:blogger.com,1999:blog-7148222695370746347.post-13552526598552038982009-12-30T07:57:27.864+05:302009-12-30T07:57:27.864+05:30Good post Subhankar.
So, is this a good time to t...Good post Subhankar.<br /><br /><i>So, is this a good time to take some profits home? The answer depends on what you did, or didn't do over the last two years.</i><br /><br />Your answer covered most categories of people, but what about those who entered between feb-oct '08 and exit during aug-sep '09, awaiting a deep correction, or those who are new entrants to the market? Is it the right time to enter the markets?The Visitorhttps://www.blogger.com/profile/06379204603893147923noreply@blogger.com