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Sunday, December 04, 2016

This too Shall Pass... Have Faith in Equity Markets...

This too Shall Pass... Have Faith in Equity Markets...


by Mr. B. Padmanaban, CFPCM
Certified Financial Planner

Our memories are generally short lived; everyone knows that market has moved from 3400 level in Jan 2003 to 21000 levels in Jan 2008. In 5 years, it multiplied whopping 6.17 TIMES

But the market has corrected more than 10%, 13 TIMES, of which 24% and 29% is the highest.

S. No
Date
Sensex Value
Difference in %
Occasion
1
1/1/2003
3390


2
28/4/03
2936
13.39%
1
3
14/1/04
6194


4
22/1/04
5593
9.70%
2
5
17/2/04
6035


6
22/3/04
5365
11.10%
3
7
23/4/04
5925


8
17/5/04
4505
23.97%
4
9
24/5/04
5123


10
23/6/04
4644
9.35%
5
11
3/1/2005
6679


12
24/1/05
6106
8.58%
6
13
8/3/2005
6915


14
19/4/05
6134
11.29%
7
15
4/10/2005
8799


16
28/10/05
7685
12.66%
8
18
10/5/2006
12602


19
14/6/06
8929
29.15%
9
20
8/2/2007
14652


21
5/3/2007
12415
15.27%
10
22
24/7/07
15794


23
21/8/07
13989
11.43%
11
24
2/11/2007
19976


25
22/11/07
18526
7.26%
12
26
8/1/2008
20873

13 

Sensex was 6194 on January 14th 2004 and it has fallen to 4644 on 23rd June 2004. In the six month period market has fallen nearly 25%. On 3rd January 2005, Sensex again back to 6679 which 43.8%. If you look at 1 year between 14/1/2004 and 3/1/2005, market is still 7.8% positive. It clearly demonstrates that sharp fall and rise or inevitable in the BULL Market...

This was considered to be the earlier bull market. Sharp fall and rise are the innate behavior of the bull market. No problem as far as Indian markets are concerned because of global market we suffered this.

I read a quote from whatsapp today "World is waiting for Markets to Crash, & Market is waiting for your PATIENCE to crash.

Those who made money in equity markets are the one who are calm in the difficult times and those who invested their little surplus during that fall. Many of you at the time of staring, I will wait for minimum 3 years and this is for long term 10 years plus, but one sudden fall is not able to digest and I got good number of calls today!

Mr. B. Padmanaban, CFPCM

Equity is nothing but investing in Business, no business has the intention to start to make quick bucks and get out. Business is for eternal and it is generation after generation. Volatility is the basic ingredient to all the businesses.

Future is always unknown, but looking always fearful for every dip and looking every dip as either opportunity or enjoy calmly will make you adventurous, it is purely on the individual hands.

Everybody knows one can create huge wealth by simply investing in a mutual fund for 10 plus years, yet the penetration is only 4% just because, many are not willing to digest the fluctuation. But, they have the blind faith about real estate and gold irrespective of the fall.

As an advisor I can keep giving you all the reassurance, but I can't transfer my conviction about the equity market which can potentially generate good return over long term, unless one understand without emotionally attached to their investments.

I always remember the saying “THIS TOO SHALL PASS”, have faith in equity and our country, when the entire world is looking India as an opportunity we are not willing to accept.

In the last 20 days, FII (Foreign Institutional Investors) sold nearly 10,990 Crore, where as DII (Domestic Institutional Investors) bought 9,250 Crore in the market. This is a very health trend that our markets are not ruled by only FIIs which people used to say it earlier.

p.s. I don’t think anybody who take loan and invest in mutual fund, it is generally their surplus which will not be required in the immediate future, whereas when you buy property you are taking loan and invest, hoping that it will generate huge returns. In the real estate you have to pay month on month for your loan, here there is no commitment and its only surplus. Those who stay invested for the next 10 years will make FORTUNE, but one needs belief and conviction… I can take the horse to the pond, but I can’t make it to drink…
  

B. Padmanaban, CFPCM
Certified Financial Planner
9884349173


This too Shall Pass... Have Faith in Equity Markets... Reviewed by S. Chitra on December 04, 2016 Rating: 5 This too Shall Pass... Have Faith in Equity Markets... by Mr. B. Padmanaban, CFP CM Certified Financial Planner www.fortuneplanne...

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