Past is past........or is it?

I used to get queries from my friends to send them my "Investment Advice Mails" from time to time. I suddenly stumbled upon this email sent back in November 2008 to few of my friends. Funny to see that what I was thinking back then pretty much is the reality now.

Hello Friends ,

Yes we are approaching the year end and investment time is approaching quickly. I'am back once again with my extensive research from the securities & investment management industry. I think this is the best time for entering the market through the ELSS way as most FIIs have stopped pulling out from the Indian Market and it seems the worse is over. Infact, FDIs and FIIs are entering Indian Markets gradually once again. This is further strengthened by the fact that America gets a new Government which is going to hopefully make the Dow Jones happy thereby spreading overall happiness over the rest of the World Markets. Well, the Sub-prime crisis drama is not yet over but that is eventually heading towards another "Great American Cover-up" like other American Cover Up acts of this century. Within the next few years the US Treasury will pump in enough cash into the system to make the lending banks forget they ever gave out any bad mortgage loans and as far as the lenders are concerned well those poor souls have anyways forgotten that they had taken a loan to buy that house they live in ; which started the financial crisis in the first place. One good thing is that property prices are once again going up in the United States which is a step in the right direction. I'am no Market Guru to predict the Indian Market but what I understand from my limited knowledge of things, I can say that the market has now for the past 3-4 years been showing a peculiar behavior. Whenever FIIs buy into the Indian Market along with influx of FDI from the "Home Coming Patels & Waswanis of the World" the Market seems to witness a sudden upward rally almost overnight and vice versa. I'm not sure where we are now if that's almost the bottom or if there is going to be a further fall from here

9964.29230.07 (2.36%)

2973.0080.35 (2.78%)
CNX Midcap

3719.6061.95 (1.69%)
BSE Smallcap

3900.1019.83 (0.51%)

but I can definitely bet my money on some good investment opportunity at this time. Look at it in this way that you would any how need to pay those hefty taxes, whereas if you do this forced investment then atleast you are giving that fair chance to your money to grow. For a general investor like me IMHO who is not looking forward to doing punter style trading or not looking for some windfall gains ; on a moderate scale over a 3-5 years horizon window one still stands to gain 30-40% ROI by investing into some very good ELSS mutual funds most of which are currently witnessing 52 week to 2-3 year low NAVs owing to the market mood, fall in the prices of underlyings and investor induced Redemptions and at the same time save some taxes. I do not foresee huge resistance in the near future and the markets should witness a strong support when the Hedge Funds & Fund of Funds (FII action) start to buy from the 1st quarter of the next fiscal thereby re-establishing the Indian Market at 14K-16K levels. This is when a quick rally will start and based upon my assumptions and analysis of the Market, I would advice those who wish to invest into ELSS Mutual Funds may choose to diversify their investments into the following Funds:

1. Principal Personal Tax Saver Fund
2. Fidelity Tax Advantage Fund (G)
3. Sundaram BNP Paribas Tax Saver (OE) (G)
4. Franklin India Index Tax Fund
5. UTI Long Term Advantage Fund (D)
6. UTI-Long Term Advantage Fund - Series II (G)
7. Reliance Tax Saver (ELSS) Fund (G)
8. SBI Magnum Tax Gain Scheme (G)
9. IDFC Premier Equity Fund (G)
10. Canara Robeco Equity Tax Saver
11. DSP BlackRock Tax Saver Fund (G)
12. DWS Tax Saving Fund (G)
13. HSBC Tax Saver Equity Fund (G)

I would like to conclude by saying that it makes sense to enter the market when it's relatively low ; than enter at a later stage when Sensex is up by says 5K-6K points , then get stuck with a fund for atleast 3 years and start to concede losses. Invest now is the best time to...

Well, that was then. If you remember correctly Markets fell further in December and again in March 2009 and then turned around. The Indian Election was the game changer as far as Market performance in 2009 was concerned. The Left was left out which made the markets smile. Most of the funds mentioned above did well too. But what I have learnt so far is that no matter what you do in the Market you will have to get the timing right every time. You need to know when to enter and when to exit. That my dear readers is the simple trick. I'm sure we'll be talking a lot about that in time to long my friends, happy investing!


Anonymous said…
da star is back in action. awesome blog. very informative n sumthing i am personally lukin forward to. Keep writing. darun
Unknown said…
Thanks a lot bro...
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