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
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