LT Investors should buy Small Caps

The small caps have had a drastic correction this last year and are now signalling an upward move. 

Managing individual small cap stocks needs active monitoring are unsuitable for the casual investor (meaning almost everybody!).

Then the alternative is to buy a Small Cap Fund. The ICICI Prudential Smallcap Fund – Retail – Growth is a good option – with a SIP rather than a lump sum (which they have just opened). If you have money to spare, however, a small lump sum bet would also be good.

The indices speak for themselves in the comparative charts below:

Screenshot 2019-03-20 11.54.53

Small Caps having corrected sharply, as you can see in the chart above, you can expect it give good returns over the next 1-3 years. The economy has settled down and baring unforeseen global uncertainty due to things like war or trade wars being unleashed, the small caps are most likely to give superior returns.

Now is the time for casual LT investors to start SIPs in small-cap mutual funds. With a 3 year horizon, it should give superior returns.

Tw: @jsvasan

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INR heading for 66.15 per USD

The strength of an economy is, amongst other things, indicated by the strength of its currency (and vice versa).

Screenshot 2019-03-17 11.37.05.png

This does depend on RBI’s willingness to let the INR rise… On balance, if left to market forces alone, the INR is headed to 66.15/$ in the near term. In the long term, the INR has the strength to rise to sub-66/$.

If the INR rises to well below the Very Long Term Support at 67.70/$ then we will surely see INR 66 to the USD. It also depends on the strength of the USD which is facing pressure thanks to Trump’s Trade War with China.

A second term for the NDA Government could well mean stronger days for the INR despite the old bogey that exports will suffer!

@jsvasan

 

#Nifty50 signals resumption of UP trend

Update 9 May 2018

Within 12 hours of this post (below), Trump’s announcement of withdrawing from the Iran Nuke deal! It’s the prolonged uncertainty that this announcement could create in global financial markets that could derail stocks & currency markets in India & abroad.

Hopefully the other powers will stabilise things – at least partially. This is yet another opportunity for China (with Russia) to step into the breach by USA. The EU isn’t strong enough to counter balance.

Watch the Nifty. Volatility may well be back.

In Feb I predicted a Nifty50 correction here.

Though it’s “early days” I’m reading the Nifty signal three things:

  1. Nifty is done with the correction and would resume the upward march.
  2. Robust growth ahead.
  3. BJP forming the Karnataka Government.

For the technical chartists, here is the screenshot today 08 May 2018:

Screenshot 2018-05-08 09.45.07

How long it will take to scale new highs the Nifty did in Jan2018 is anybody’s guess. But let’s remember that markets are typically lead indicators.

Baring a completely unexpected result in the Karnataka 2018 elections, its a safe investment ride to the next political events in the last quarter of calendar 2018.

@jsvasan

More Pain to come #Nifty

This correction was not only long overdue, it’s been aided and assisted in a dogmatic assertion by Arun Jaitley (FM, India) and a global bubble of sorts, led by the US Markets.

There is more pain to come – if not in a further dip, then in a prolonged sideways movement with some shallower dips. It NOT the time to buy, yet, for LT Investors!

Patience will be rewarded in a generous way. Avoid trying to catch a falling knife.

Screenshot 2018-02-06 19.09.18.png

My expectation is that 10,028 on the Nifty is a possibility.

It is certainly NOT a time to sell, in panic!

@jsvasan

 

Nifty could be doing a correction.

Nifty is giving signals of a correction. 

Screenshot 2018-01-03 22.32.17.png

The technical indicators seem to indicate another dip. This may be another entry point for those who have stayed away, or even a more serious correction if the ensuing Elections in Karnataka go against the BJP.

For very long-term investors, it could be an opportunity to add to the portfolio. For other investors, it could be a Sekk and Buy Back opportunity. This is not a trading call.

@jsvasan

Nifty now on a tare!

I suggested that the Nifty (Indian Stock Market) was giving an opportunity to buy/enter on 6th December 2017.  Now, the Nifty is on a tare!

While it’ll probably give smaller dips in the future, the markets expect, as the PM himself said, more, better, faster and effective reforms between now and 2019 – including some that address areas that have not received the necessary attention, like agriculture and farming. This, combined with the effects of GST and Anti-Corruption drives will only grow the economy like never before!

Screenshot 2017-12-19 19.40.29

The long-term charts clearly show the solid, step by step rise of the markets. This is a full-blown thumbs up to the PM’s programmes.

One Year 2017

Screenshot 2017-12-19 19.55.00

Since 2014 when Narendra Modi took over.

Screenshot 2017-12-19 19.54.51.png

These charts speak for themselves even for the layman. No need for any explanations!

Nifty Consolidating to break out in time!

The Nifty has tested everyone’s patience. And may well continue to do so for more time.

From 10th July 2017, it’s in the range of 9,684 to 10,182 a range of just under 500 points. The band itself represents a BUYING opportunity – especially for selected stocks. The Nifty ETFs may also be a good option for lower risk-takers who want to hold for the long-term (i.e. greater than 1 year).

The reason I say it’s waiting to break-out (up) is that it made a double bottom at the 9684 level. On 11 Aug and at 29th Sept. While purists will say it was 9685 and 9687, I’m more a pragmatist. In this age of machine-trading, with manual day-traders, two points on a scale of 10,000 makes for ‘in-built calculation errors in computing the index!

Screenshot 2017-10-11 10.01.06.png

For those who want to play it safe, wait for the breakout above 10,182 (black horizontal line). OR for those who are pessimistic looking at TV coverage, wait for a Break-Down below 9,684.

But I’ll remind investors of an old adage in the stock markets: Markets climb walls of fear, and puncture balloons of euphoria.

@jsvasan

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