Response to Mr. Adi’s Comments…

Mr. Adi’s Comment

Hey Naveen you know I am new to these stocks and shares its ok studying the financial definitions I get a bleak idea but the share market is acting very strangely its going up and down for the past few days and I have been observing the pendulum like swing is there any conclusion in sight so that new and aspiring investors like me would invest????

My response

Well adi, share market is always like that only. Previously it was like that, now it is like this and in future also it is going to be same. Since, you can’t predict human nature. And share market is nothing but, full of human calculation, sentiments and expectations. Each person may be having different perspective about each share in the market. For one person market may look like good time to sell but at the same time another person look at this as a good buying opportunity. So if market is overburdened with sellers then market will go down and vice versa.

See in any kind (Bull or Bear) there will be both buyers and sellers. Because, in bear market if only sellers are there and no buyers then there is no question of bear market. And this holds good for bull market also, there will be buyers as well as sellers.

Now coming to present condition, according to me, its good time for investors and EXPERIENCED traders only. Its not good time for new entrant traders! Investor is one who is planning to hold his investments more than 1-3 years. And trader is one who buys and sells at any time of the day, week, month or so. Like me!!!

Investors most of the time go for fundamentally strong companies, with the help of self gained knowledge (from experience) or brokers or portfolio managers. But for trading you need to have your own calculations.

According to me, even investors should not expose their full liquidity to the present condition. Since present market is pull back rally in a bear market. So invest only 25% or 30% of your total investment amount now and gradually go on investment in successive steps so that you can go on averaging. Since in this bear markets biggies like FIIs and Institutional investors are not taking long position. So no question of retail investor like me and you!!!

So first you decide what you want to become Investor/Trader. If you want to become an investor then go ahead with 30% of your investment on investing fundamentally strong (As Mr. Nifty Mehra always says) companies. Since most of companies are beaten down heavily like 40-70% from their peak in January 2008. And at higher or lower (both are possible) invest your another portion and so on, so that you can hedge the possible risk.

Or if you want to become a trader, then just follow me! Just kidding, u need to know some basic things about the market. And according to me that comes when you actually enters the market, not by reading any books or any other thing (like my blog!!! Hey don’t stop reading…)

Keep reading…

Keep investing (or trading)…