In a falling stock market avoid these mistakes


    1. Getting anchored to a price

    We often set a benchmark price for the shares they hold. This benchmark is usually the purchase price but could also be the highest level touched by the stock. Future decisions on the stock are based on this price.

    1. Buying more to average

    EVERY BODY makes mistakes, but some investors tend to compound them. If the stock you purchased drops, don’t try to buy more shares to bring down your average buying price. Investors often try to cover their losses by buying more of the same shares at the lower price.

    1.  Buy scrips at 52-week low prices

    A SLIDING market turns some investors into value pickers. They actively look for stocks trading near their 52-week low. These are perceived as good bargains since much of the downside is thought to be already captured in the price. However, some of these ‘opportunities’ may actually turn out to be value traps.

    1. Altering your financial plan

    A SHARP fall in the market can lead investors to alter their financial plan or investment strategy. Some may be tempted to excessively ramp up exposure to equities to benefit from the market correction, while more conservative investors might deem fit to take out all the money to be on the safe side.

    1. Stopping SIPs because of the fall

    ONE COMMON mistake that small investors make is to stop their systematic investment plan (SIPs) in equity funds when markets tumble. This defeats the very purpose of the SIP. A bearish phase is precisely the time when sticking to the SIP discipline will help you achieve your long-term goals.

    Long term capital gains, what actually is the impact?
    One advantage for investors who have invested before Jan 31, 2018 is that the market value of investments as on Jan 31, 2018 will be considered as Cost of Acquisition for calculating LTCG instead of the Actual Cost at the time of purchase (Scenarios 2 & 3 of the above table explains the benefit of this clause). If the market value of investments as on Jan 31, 2018 is less than the Actual Cost of acquisition, the Actual Cost will be considered for calculating LTCG ( Refer Scenario 4 in the above table).
    As a long term investor, you should not be worried about the Long Term Capital Gains tax. If we take scenario 3, the tax payable on the redemption amount of Rs.8,00,000 and Capital Gains of Rs.1,50,000 is Rs.5,000/- which is 0.63% on redemption amount and 1.67% on Actual Gains (Rs.3,00,000 = Rs.8,00,000 - Rs.5,00,000) respectively.
    After the re-introduction of the LTCG tax, it makes more sense for investors to focus now on choosing right funds that meet their investment objective which will help them achieve their financial goal over long term.
    The Central Board of Direct Taxes (CBDT) has issued 24 frequently asked questions (FAQs) on long term capital gains (LTCG) taxation on equity shares proposed in the recent Union Budget. Click here to know more
    So irrespective of taxation , equities have a potential to grow and it is advisable to be invested in this asset class for long term.
    * The 4% Health & Education Cess will be applicable on the tax amount and not on the gains. So taking Example 3 ahead - the Cess will be applicable on the tax amount payable (Rs. 5,000) and not on gains (Rs. 50,000). Surcharge willbe applicable based on the level of income of the investor.
    Companies to choose in Declining markets

    Decline not always a sign of getting out of the game because all are doing the same.
    We are not in the investment arena to decide where the market will move or what would happen in the future but we could follow the simple rule which says BUY LOW SELL HIGH.

    it clearly states that despite of having crunch in the small and midcap section of the market specifically if we talk about stocks , mutual funds etc. The market is signalling an opportunity to grab the position at a lower price taking in to consideration the measures in the economy and the signalling growth prospects.

    Our economy is targetting 5 trillion in near future which is going to leverage the sectors which are not only comes from large cap category but also the smallcaps.

    We are not the future predictors but we are as mindful to understand,what data and analytics says.

    Credit Rating

    Creditg rating reflects the credibility and accountability of the security of your choice.
    In the rating allotted to each security AAA stands for highest whereas D stands for lowest.

    The rating is given by various rating agencies such as CRISIL, ICRA etc. The rating is based primarily on the financial stability of the firm ,its debt and outstanding shares in the capital market,subscribed share capital, profit after tax in the subsequent financial years.

    This rating is used for various agencies and investment managers while deciding for the composition of investment portfolio of the organisation and individual.