What if we buy only the crash everytime ? Every few years market gives opportunity and when it recovers it recovers sharply, what if we invest in stocks only in deep crash and then sell in profit and again wait only for crash ? For a ten year period ,will this work or we should just stick to sips
There has been research done on this and there is data available, although not with me. Keeping that aside, investing is also learning, a continuous learning up until a point where you don’t have to learn any more, and to learn, you have to be in the market, not every single day, but more or less connected, I am talking about direct equity here, buying stocks.
Yes, you can buy once in a while, in a crash, and then become profitable until the tide turns, and learn, get better, improve until the next crash happens, but this is tough, like waiting on the sidelines and not in the water, not impossible but tough. Value investors, or investors with some experience do this, but even their calls are not correct every time.
There are many many ways to do all of this, as nothing is written in stone. There are quotes both about investing in overvalued markets and waiting for a crash. Market is dynamic, a lot of external and internal factors decide its movement, so have a clear plan, choose the products that suit you, and if necessary refine your plan and go forward.
I did buy equity and i bought good company stocks but i got into stock market in 2021 end , i look at markets everyday for sometime when i get time , and i m noticing nothing much has happened in a year or two my stocks even when nifty is at 18k. So my portfolio is still in red only , and if this continues for a year more, i really haven’t gotten anything from my investment. So i was looking at sips where experts handle the money but then i had this thought too,so asked.
It will definitely work and you don’t even need to look out for stocks. Just buying Nifty bees during a crash and selling it in rally will be enough
One year of time in itself is one year’s time, as in life, a lot of things happen in one year, an unmarried girl gets married and becomes a mother, the transition of a girl to a mother, that’s how long one year is.
But in the context of stock market collectively, more so with stocks, one year is just 4 quarters, nothing happening in this time is pretty normal. Depending on the nature of the factors, it may even take more time to get some clarity. Global interest rates, war, unemployment, food production, rainfall etc are ongoing process, they cannot be solved instantly, they take time, sometimes a couple of years.
And in this context, unable to have any returns in your PF is normal too. That is how equity works, its returns are non linear, it goes up, goes down, stays down, and moves pretty quick defying gravity, and then falls more than one imagines, it is a rollercoaster ride.
SIP in MFs do have their advantages, but prepared to have more or less the same of kind of returns, because even who manage your money invest in the same market/markets.
Your lengthy answers make simple things look complicated to me.
You are GB aka Gyani Baba.
Agreed ,so if i study markets then i can just buy stocks myself in dips and no need to give money to mutual funds ,I’m just not sure in long term if I’ll be able to make more returns than them. In crashes one doesn’t even have to know anything. Buying anything and everything will rally once it rallies.
Market is an ocean, you know that, so depending upon the question, I give answer. Particularly when I think (and I could be wrong) the questions are asked by people new to investing
Stocks and MFs are different. Some 25 years ago, people who invested in MFs got returns like 20-25% per annum, such was the market then. Few people were investing, and Indian market was small, so the people who were investing were taking some risk, and it paid off, they got rewarded handsomely. Fast forward 25 years, it is hard to get 12% now, because Indian market has matured, there is a lot of participation from the people. And as time progresses, our market will give even less.
With stocks, you have a chance to amass wealth, if everything works out, this happens with 1 out of 500 stocks, if everything works out, you get see your investment becoming 100 times, 150 times. The reason why people buy stocks, why they search, for what are called multibaggers, huge winners.
So if your expectation is 12%, look no further than MFs, and if it is not, you have a choice of investing with stock advisories or on your own. If you choose to DIY investing, then brace yourself for a bumpy ride.
If you are going for investing, even if you want to do positional trading (lasts for few months), in my opinion, buy multiple stocks of industry, you are investing in.
Cause, we can not say which stock will give great returns, so its better you buy many many stocks of industry that you are preferring for then you can eliminate those stocks which are performing bad with time.
Another thing in my opinion you can do is, swing trading. It is very very easy as compared to intraday. You just have to buy stock at its low and sell at its swing high (and vice versa) with just employing candlestick patterns.
In this way, you do trading for about 1-2 days to 3-4 weeks. The condition is only that you expect 10-12% returns and once that achieved or once swing high/low is achieved, you have to exit.
That way, you can easily make 50-60% returns in a year!
You make it so easy Himanshu, I wish it is that easy
If what you say happens, why are not MF managers making such returns, they have many analysts who cover fundamental aspects of different sectors and technical systems at their disposal. And why has no MF done that?
An idea when it originates is intriguing sure, it makes me feel like Newton, but only when I start to implement it, the picture emerges, and it takes some time for the full picture to take its shape, and when it does, the picture that is in front of me is no match what I thought it would be
Of course, a journey of thousand miles starts with one step, but the journey is not smooth, it is full of twists of turns, some roses and many thorns.
What you are saying about investing a group of stocks from the same industry is followed though, the basket approach, when a particular sector is rising, and when people are not sure of which stocks to bet on, they bet on the entire sector, and while it may not give the great return of betting on the one or two stocks, it will give good returns. Investors do this, yes.
I do not know when the stocks stop falling. I bought iex at high ,i bought stock at low ,it’s still is falling even when nifty is at 18k. Should we do swing trading even with stocks that have bad results ? For example bandhan bank is so low now,intellect has fallen 14 percent in a day. It’s almost half of what it was . I know Fibonacci retracement only ,to look for levels and if they keep breaking then should we avoid such stocks ? Or which primary indicator should i see for swing trading. Also i should be allocating more capital to one stock if I’m doing swing trading and that’s why the fear, atleast if i buy good quality stock even when it doesn’t move up i know it’s in portfolio for long which will be fine.
The fundamental question that you should ask yourself is, are you an investor or are you a trader? You can be both, there are people who do both, but the way investors and traders look at the same stock is different. In other words, you have to have to different perspectives, and it does not come quickly, because simply put, they are different things. Trading is done for lesser time periods, whereas investing can extend to years.
Investors focus on the business, they know the reasons why the stock has fallen, and take the decision of staying invested or sell. Traders need not necessarily know about the business of a stock, because there are traders who rely only on charts, technical traders, they don’t have to know about the business, but they have their own plan, a plan of having a target price in mind, a stop loss in mind if things don’t work out, they cannot afford to lose beyond a percentage of capital, because they may need capital for the next trades.
Two different ball games, played in the same ground, with the same ball, by the same people.
I forget to include luck but that not plays that much role if trading is backed by a good system.
In a year, 50-60 % returns can be got through compounding money, like if you get roughly 10% per month, you can achieve that for sure. And swing trading is as such, that you jumps from one stocks to another potential stock extracting profit from each one in intervals of days.
Risk:reward ratio also comes into play. Say if you generally get 1:3 RR then it makes things easy to do. I have definately not done swing trading, so yes, i don’t know the real journey.
But you have done that what I’m saying, so yes, my opinion maybe all baked up in my mind well, I’m just trying to give an idea, if that works, my goodness!
You may not know this, but Newton, the man whose scientific discoveries rule our life, has lost money in the stock market.
They say, this is his quote - “I can calculate the motions of the heavenly bodies, but not the madness of the people.”
I don’t think I have to say anything else, or I have anything to say
I don’t think anyone is making 60 percent
Not the people we know of, but there exist investors who have been consistently making more than 30% CAGR for decades, this is phenomenal. It is this consistency that creates wealth.
60% in a year sometimes happens to many with no talent or skill, like when the market is fueled by liquidity, it happened 2, 3 years ago. A rising tide lifts all boats.
Exactly and that’s why my original thought of just leaving everything and only waiting for such crashes but again we don’t know when that wud come again.
There exist opposing statements regarding the market, and the arguments are correct, depending upon the situation the market is in.
What goes up must come down, but it is not the question of if, but when. When will it come down? Very hard to predict each time. There are visible signs, but as individual investors, we can never know when.
So have a plan, learn, refine your plan as per your needs, learning and experience, and go forward.
You can papertrade it for a month, i maybe wrong but your analysis will answer how much you can get in a month.
Just take trade according to candlestick patterns and to select stock, search for 52 weeks high and low stocks in google, then select some good stocks from list, open their charts, see if any reversal candlestick pattern or chart pattern is their? If yes, trade according to rule.
Here I’m not saying that you will get 60% returns (i maybe totally wrong), but atleast, this will help to know how much returns you can get and also will help you to understand market better.