Trying to make money in equity.....when is the time is right to buy

Today, I'll share with you when the time is right. 

I always love to own Diversified Equity Mutual Funds instead of investing directly in Stocks for My long term investment and i insist all my friends and Customers to own Diversified Equity Mutual Funds for Long term Wealth Creation.  

Let me brief you what is Diversified Equity Mutual Funds

An investment fund that contains a wide array of securities to reduce the amount of risk in the fund. Actively maintaining diversification prevents events that affect one sector from affecting an entire portfolio, make large losses less likely.

As all Diversified Equity Funds invest in stocks and it is related to each other i feel it make logic to see stocks or funds picking style.

Let’s See,

Trying to make money as the market goes down is difficult… but under the right circumstances, it is possible…

For most people, it's not worth even attempting. 

In short, making a bet that stocks will fall goes against the grain… Thanks to earnings and inflation, stocks have an inherent upward bias. 

The market does crash by 40%-plus from time to time. Stocks fell 57% from 2007 to 2009. And the stock market dropped 49% from 2000 to 2002. But these kinds of spectacular falls are the exception, not the rule. They're hard to time just right. 

Today, I'll share with you when the time is right. 

Let me explain… 

If you've read my work for any amount of time, you know my investment prism – I want an investment that is 1) cheap, 2) hated, and 3) in the start of an uptrend. I always want to make investments that are good values… that most investors aren't interested in… and that are trending up in price. 

That's the ideal setup for an investment to go up. 
If you see the opposite setup, then you have a recipe for lower stock prices. 

We need to look at both the trend AND value to find the best time to short stocks (to bet on lower prices). 

The simplest way to think of opportunity in the stock market is to think of it in four different states… based on trend and value. 

The easiest way to visualize this is the graphic below. Take a look… 

This is simple. The market has four distinct states based on trend and value. 

Through testing dozens of different systems to determine what REALLY works, we found that each state of the market leads to significantly different returns. Here are the basic states and how we want to be invested in each: 

1.	Cheap and in an uptrend – We REALLY want to own stocks.
2.	Expensive and in an uptrend – We keep owning stocks despite valuations.
3.	Cheap and in a downtrend – We're not long OR short.
4.	Expensive and in a downtrend – The only time we want to bet against the stock market.

There's only one state of the market in which you'd want to bet against stocks… And that's when they're expensive and falling in price.

Today, stocks are somewhat expensive. But they've rebounded from their lows and are NOT in a downtrend. That means we're not in the "red" mode right now… which means shorting stocks today is a bad idea.

Personally, I'm still bullish on stocks. And I believe we could see significant gains over the next 18 months in what I've been calling The Melt Up.

Stocks will certainly fall at some point. And when we finally fall into the red in the box above, we'll bet against some stocks for the first time in a very long time.

We're not there yet… But now you know the principle for success…

Don't bet against stocks until we're in "the red." 

Domestically, we are getting incrementally positive from a medium term perspective after many quarters of being cautious, as you know. What do we see that others don’t? 

A confluence of events like better IIP, lower inflation, lowering interest rates etc.,all a harbinger of better times than worse, if the past were to rhyme with the future. We once again are taking a contrarian position from a medium term perspective, just as we were alone and skeptical in Jan – Mar of this year. 

Yes! We are on tenterhooks like most others but for different set of reasons. We wish to see if the narrowing window of opportunity – that the ground up situation is getting better, coincides with investors good humor till date. If it does, it shall be a buying opportunity that investors, who have been cautious so far, will look back and enjoy buying into. 

Again, I always love to own Diversified Equity Mutual Funds instead of investing directly in Stocks.

So, Funds which can generate good Returns over Long term

1)     HDFC TOP 200 FUND & HDFC CAPITAL BUILDER FUND

2)     RELIANCE VISION FUND & RELIANCE RSF - EQUITY FUND

3)     ICICI PRU TOP 200 FUND & ICICI PRU FOCUSED BLUCHIP FUND

4)     KOTAK 50 EQUITY

5)     L&T EQUITY FUND & L&T INDIA VALUE FUND

6)     CANARA ROBECO EQUITY DIVERSIFIED

7)     MIREA ASSET INDIA OPPRTUNITIES FUND

8)     DSP BR EQUITY FUND & DSP BR FOCUS 25 FUND

9)     UTI MASTER SHARE & UTI LEADERSHIP FUND

10)IDBI EQUITY FUND & SBI EQUITY FUND

Few More to watch Franklin prima plus, Birla advantage fund

Please get in touch with Us to know Scheme information   

Happy staying invested for now! 

Thanks a lot for your time and allowing us to stay in touch with you. All of at Tejas Consultancy are grateful for the opportunity to serve you. 

-- 

Regards,

Ritesh.Sheth CWM^®

CHARTERED WEALTH MANAGER

              Helping you invest better...  

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