Market Turmoil

Some Wealth Inspiring thoughts
Ø Timing is vital. It is much more important to buy cheap than to sell dear.
Ø Time in the market is more important than timing the market.
Ø It is never your thinking that makes big money, it is sitting.
Ø Success in market usually comes to those, who are too busy to be looking for it.
Ø Managing money requires more skill than making it.

Wealth as they say is like old wine. The more time it takes the longer it stays for you to savor it!!
Stock Market is generally feared by all! And may be rightly so!! Investors usually see – or rather made to see—the short term fluctuations rather than the long term upside potential which comes steadily but without much of an announcement! It’s the short term upheavals are talked about in every newspaper—much to the contrary!!!

Your would not find many investors talking about say Tata Steel moving up from a level of Rs. 530/- a year back to Rs. 745/--- a cool 40% gain! Rather you will come across many investors crying hoarse about the price of Tata Steel having gone down from Rs. 900/- on 29/10/2007 to present day price of Rs. Rs. 745/- -- a fall of 17% in just 8 months!
We at AIMS have always believed that time in the market is more important than timing the market! A 40% gains over a single year easily drowns in the din of 17-20% fall in a matter of months!
What is true for Tata Steel is true for any investment even for a Mutual Fund. We believe that Mutual Fund is the route for retail investors! It is not that we despise or discourage direct equity—direct equity is preferable only if you have the habit of digesting the fluctuations and also have the time to do your research because investing without research is like playing poker without looking at the cards.
Another compelling reason for investing in Mutual Funds is highlighted in the last wealth inspiring thoughts as stated above—managing money requires more skill than making it!
There are very few options currently where the real returns -- returns in excess of the inflation—are positive. Hence investments in PPF, Post Office; RBI Bonds or bank deposits tend to depreciate your corpus rather than appreciate. They will in all likelihood not see you through your retirement or even be able to fund your child’s higher education! Only Equity has the power to give you inflation adjusted returns!! Consider this :- a monthly investment of Rs. 1,000/- in DSP Merrill Lynch Equity Fund from 02/05/1997 till date would have grown from Rs. 1,33,000 to about Rs. 8,46,000/- -- a compounded annual growth of 20.32% (Source DSP Merrill Lynch Mutual Fund). AND THAT TOO TAX FREE!! This in spite of Dot Com meltdowns, Kargil, 9/11 etc.
The thought now looming in your mind is “What Now”? “Where will the market stabilize”? Whether this is the right time to invest or not??
We must admit frankly that we are unable to forecast the index level from where the markets would start climbing up! No body in this world – not even the legendary Warren Buffet—will be able to predict the index level!
As for “WHAT NOW” – we can only say that the India story is very much alive and with a heavy discount sale currently on – GRAB IT—before it’s too late!!
At the end we would only repeat what Lord Krishna said to Arjun during Mahabharata – tum karm karo, phal ki chinta mat karo (Do not worry about the results, just do your duty!)

Investing is your duty TODAY!

Happy Investing!!