It’s all about timing

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With blue-chips trading at their rock-bottom levels, it’s time for investors to strengthen their portfolios

American humorist Arnold H. Glasgow rightly said, “Success is simple. Do what’s right, the right way, at the right time.” And it’s time for the Indian investors to understand the value of his words. After a year-long carnage, most of the high-voltage stocks seem to be trading at their rock bottom level. That means stocks, earlier which were out of reach for the retail investors, are now standing right at their door steps to be picked up, but of course, not without following the basics.

Rajen Shah, Chief Investment Officer, Angel Broking Limited, advises, “This is the best time to buy into the market as all the stocks are on a low and once the market improves and stocks value picks up gradually, the investors would surely earn a fortune. The equity market is likely to roll back to normalcy soon and we would see the BSE’s Sensex again touching the 21,000 mark and going beyond three years down the line i.e. probably in February 2012.” Going by his words, this is actually the right time when retail investors should seriously consider some asset building exercise in the stock market with a long-term perspective in mind. Also they should look up to blue chips or such other stocks, which have already proven their metal in the market during earlier recovery phases, for a better output in future rather than indulging themselves in mid-cap and small caps that tend to be highly volatile. Agrees N. Wadhwa, Managing Director, SKI Capital Service Limited, as he says, “People should invest in large cap companies with a sound business model. They should keep themselves actively involved in the market dealings and keep themselves constantly updated about the market conditions to pocket a better return in the long run.”

Large caps like L&T (trading at Rs.580 today as against a high of around Rs.4,300 last year), Hindalco industries (trading at Rs.39 as against last year high of Rs.215), ACC Ltd. (trading at Rs.531 today as against a high of around Rs.1,030 last year) and Sterlite Industries (trading at Rs.250 presently against Rs.1,033 last year) et al can actually do wonders for an investor down the line. These are shares of such companies, which have the potential to shoot up really high once the markets witness recovery. But, investors investing at the moment must be a little patient in their approach and hold on to those scrip for the right time to arrive. After all right time is what matters the most in the stock market.

Deepak Ranjan Patra

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Source : IIPM Editorial, 2009

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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