Thursday, August 23, 2007

Looks like this the golden period to invest in shares..

Hi all,

Would you be interested in investing your money in shares? Looks like this is the best time to invest in shares with a medium term (6 months – 9 months) or long term perspective (anywhere between 12 months – 36 months) if not with a short term perspective...

Most of the IT (heavy weight sector) stocks like HCL, Satyam, Infy, Wipro (heavy weight companies) are on a 52 weeks low price… I feel that the market will bounce back from this bearish trend in another 6 months timeframe. In my opinion if we invest now we should get anywhere between 15-25% returns in the next 6 months time frame…? (i.e., If I invest Rs. 1000 now I should get anywhere between 1150 -1250 in 6 months time frame)

HCL – around 289*
Infy – around 1759*
Satyam – around 410*
Wipro – around 444*

* Based on yesterday’s closing..

I had a look into the fundamentals of the above listed companies like P/E (price per earnings) and EPS (earnings per share) and the net profitability for the last three years. The fundamentals definitely look positive for all the above 4 companies...

Apart from the above IT sector stocks that I have mentioned over here, few other stocks that look appealing to me are Tata Motors (automobile), ICICI bank (Banking), SBI (Banking)

This is the time when we need to buy out stocks in small chunks. So that even if it goes down further we could average out…For eg., if I intend to make an investment of Rs. 50000 in Infy shares I invest only 10000 immediately and wait to see if the market goes down further.. If it does I invest another 10000 and so on…This is called the averaging strategy….

What do you say/think?

Disclaimer: All stock market investments are subject to market risk….. Whatever predictions that are made are with the assumption that future will continue to behave in the same way as the past…. :-)