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How to ensure your investments don’t crash when the market crashes

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Investment Strategy Let us begin with a caveat here. When the market crashes by 35%, it is very unlikely that your portfolio will even remain flat; forget about positive returns. That is just not practical. Your  investment strategy  must be focused on two things viz. ensuring that your long term goals are not impacted and ensuring that you manage risk effectively. To ensure that your portfolio does not crash with the market, here are 6 things to ensure. 1. When you create a portfolio, put your goals at the centre You cannot start building your portfolio like Alice in Wonderland. You need to know what you are investing towards. Your portfolio must be linked to your long term and short term goals; not an exercise in isolation. If you have a long term goal that stretches to about 15-20 years; like retirement or your child’s education, then you can use a diversified portfolio of equities or equity funds for the same. In that case, don’t worry too much about the vagaries of the
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Have you predicted market movement as elaborated here?

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As  stock market trader s we are all well acquainted with applying  technical analysis  tools for trading. And currently market has witnessed crash due to Covid-19 pandemic. In this scenario let us analyse the  Nifty 50  movement and few other stock price movements and find out the opportunities some of us would have missed. Then we will understand what the current price levels and patterns indicate for a trader or investor. While this post will be a refreshing one for an experienced trader this will be an educational treat to the novice. First let us look at the Nifty 50 chart below. With the Nifty chart we will try to find out trading opportunities by applying various technical analysis tools. Trendline In the Nifty chart a long term trendline joining the bottoms since February 2016 is drawn and this trendline serves as a support level.  On Feb 27, 2020 Nifty broke this trendline indicating long term weakness in the market.  If traders who held long position had e
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Location: Chennai, Tamil Nadu, India
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In the backdrop of Yes Bank crisis, how can an investor avoid getting trapped in future?

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The  Yes Bank  episode may have settled for now. The future is still not clear about whether it would see a run on deposits and how long SBI would continue to support the bank. Also, what happens when SBI finally chooses to sell out after 3 years? These uncertainties remain. The bigger takeaway for the depositors is what are the lessons to take away from the Yes Bank case? The idea is to avoid getting trapped in such a situation. Remain, depositors of Yes Bank have been bailed out but the depositors of PMC Bank have not been so lucky. It is OK to err on the side of caution but here is what people need to take care of when opening a deposit account. Six Lessons from the Yes Bank case As we look back at the Yes Bank episode, it was a very basic issue of a bank mis-selling its products to a gullible audience. In an era marked by low interest rates, there is nothing more compelling than higher rates on offer. But that can work both ways as a lot of the Yes bank depositors realized
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Location: Chennai, Tamil Nadu, India
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How can I learn stock market trading quickly and easily?

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The great mathematician Euclid once said that “there is no royal route to geometry”. The same applies to  stock market  trading too. There really is no quick and easy royal route, but there is certainly a disciplined route to  learn stock trading . Here is how you can go about it. Remember the basic premise that to learn stock trading, there is nothing like the real thing. So start by opening your  online trading account . You can never get the pulse of the market unless you trade your own money. How to start trading effectively in the stock market?  It all begins with opening a  online stock broking account  and  demat account . As mentioned earlier, there is nothing like the real thing. Simulation only works up to a point. Find a good online  stock broker  and  open an account . Become familiarized with the layout and free trading tools and education offered to clients. That is the place to start. There is a lot of knowledge on markets floating around. Read good books like B
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Location: Chennai, Tamil Nadu, India
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Is gold a safe investment for my child’s long term future? Is gold a safe investment for my child’s long term future?

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Education costs have gone through the roof. Now planning for your child’s future is not just a choice but a necessity. Consider these samples. An engineering or medical degree in a medical college will set you back by at least Rs.25 lakhs over five years. A 2 year MBA would approximately cost you an equal amount. That is if you are educating them in India. If you plan to send your daughter abroad for under graduation and post graduation, then you can multiply these costs by a factor of 5X. Obviously, there are various investment options in front of you to reach these goals but the condition is that you start early and invest in a systematic manner. Let us look at gold as an asset class to plan your child’s future and then look at other equally interesting options that can create serious wealth over the long run to pay for your child’s education. Investing in gold for child’s future – How good is that? There are different ways to invest in gold. You can invest in physical gold l
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Location: Chennai, Tamil Nadu, India
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If you are confused with market volatility, it is time to buy index ETFs

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In a span of just 45 trading sessions, the Nifty cracked from 12,340 down to 8469 resulting in a net loss of 31.5% in just a little over a month. But what should be the investment strategy now? It is simple to say that this is the right time to buy stocks but what stocks do you buy when stocks like HDFC Bank and TCS have lost 30% from their peaks and a stock like RIL has lost 40% in just one month? The easier answer is to go for buying the index. That is because; fishing in troubled waters is fraught with risks and it is hard to put a stop loss in such a volatile market. A simpler answer would be to start accumulating index ETFs. Let us first understand an index  ETF Did you know that the Sensex has appreciated from 100 to 42,000 in a span of last 40 years? That is a compounded annual return of around 16.5%. If you add the dividends, the annual returns would be closer to 18%. But you may wonder how to buy the Sensex? That is where an index ETF comes in handy. Of course, you c
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Location: Chennai, Tamil Nadu, India
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Tax Loss Harvesting

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Financial Harvesting! Just we have passed the crop harvesting season and its time to think of tax harvesting now. As we are nearing the financial year end, we are left with just few days to plan our tax. If you have not planned your tax yet, and are puzzled how to do it especially in the light of the proposals in Union Budget 2020, we present you one way to explore tax saving options and that is Tax Loss Harvesting. What is Tax Loss Harvesting? While investing in stock , all of us are bound to have some laggard in our portfolio where our hard earned money will be blocked due to negative returns from that stock. Many are left with no option but to hold on to the stock till it turns to be a profitable one. Tax loss harvesting is one tool wherein the stocks that are in loss in our portfolio can be sold and the loss can be set off against capital gains and reduce the tax outgo considerably. The short term loss from stocks can be adjusted against both the short term capital ga
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Location: Chennai, Tamil Nadu, India
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