India Stock market update April 09

I had mentioned about 5 months ago that I have started entering the
Indian stock markets again. I have made investments progressively over this period in small quantities every month.

As of yesterday, Some holdings have shown negative , some as high as 250% . my porftolio shows a 50% profit in this depressed market overall.I am exiting the market again this week, and will wait till the elections are over. By then we will also get a confirmation on whether this "turnaround" is for real or not. If, by then the market has gone up another 10 ro 20%, so it be, but I want to
play it safe, since I already have 50% in my pocket.

This is the first time I am experimenting with this "slow and steady" investment
model, over an extended period, and it seems to work well.

For those of you who intend entering the market, but have not done so yet, my
suggestions would be:


1. If you are going directly to the market through online trading or your
broker, buy select scrips in small quantities- remember, this should be with a 3
to 5 year horizon at the least.

2. Fix a target of return that you would desire, and do not get greedy- just
pull your hard earned money out before the hell breaks loose again. You can
choose to leave the Profits portion only, till as long as you want.

3. In terms of timing, you can continue to buy in small quantities,
notwithsantding the ups and downs in the market. The other alternative is to
wait for the election results to be out. If it is a hung parilament, then
chances are that the market could crash by 5 to 10% on the day the results are
out, and that would be the ideal day to BUY. Keep you money ready for that day,
if you do believe that it will be a hung parliament.

4. If you are buying Mutual funds, keep buying in small quantities in select
funds only. Don't spread too thin. Look for funds with the best historical
returns, and don't bother too much on annual charges as long as performance is
good. The other approach would be, if you have money earmarked for retirement,
then wait for a market correction, and put in the money in big chunks and forget
it for the short/ medium term. Analyze the Fund Manager's pedigree before you
jump in. Remember - any mutual fund is only as good as the individual fund
manager. I personally prefer Sanjay Duggal of HSBC India Growth Fund.

5. In the climate, gold could be a good long term investment, given, the
impending Dollar collapse, so if you planning for buying jewellery for your
family, then I would suggest waiting a bit for gold to correct ( I think Gold is
overbought, technically) and then put some of your money to keep your family
happy!!