Peeping into 2012

Here's an article which states that 2011 has been the second worst year for the Indian markets in last 14 years!.

Although ,such plain statistics do not matter a lot for the individual investors, the fact is 2008 has been the worst year. 2009 the best i.e the one which followed the worst. ( in the last 14 years,-I am not sure why 14 years were picked up)

So , what do you expect after the second worst year.. No predictions :-))

http://business-standard.com/india/news/2011-second-worst-for-investors-in-14-years/460101/

5 years , still no gains

Whenever someone asks , what do you think is a long time horizon from an investment perspective, my answer has been always, time span > 5 years.

Imagine some one who started 'investing for the long term' in 2007 ( that too buying stocks in one go , holding it for 5 years , they would  not be so happy now)- The so called long term  stocks bought in 2007  most probably would still be in RED.
Now, the questions that may arise are -Does investing in equity really work??. Even a fixed deposit would have helped increase your base amount by 80% before tax. Was it a mistake not to sell off in 2010 rally??. Doesn't it defeat the purpose of long term??

Even a good stock bought in a wrong time may chicken out for a long time and not yield good results. So. how to know whether it is a right timer to buy. Again, a question that cannot be answered so easily.

What's the way out?

1. SIP in Equity mutual fund spread over a greater span ( 36 to 60 months) can diminish the risk.

2. Buying a stock after solid analysis ( this is not fail proof , but helps avoid major glitches) and buying at a time when everyone is panicking .

Any day no.1 is the best option for a retail investor. Simple looking things at times can do wonders.

Policy matters!

Rajesh was quite excited about the progress, so far. He was working for a software company and had now cleared his interview with a consulting company.

He had to meet the VP of the division before the roll out of his offer.

'Should be just a formality to meet the head of the division', Rajesh thought.

He was waiting outside the VP's room for the chat.

The HR manager emerged from the VP's room and pulled Rajesh in for the final round.

Rajesh glanced at the VP, smiled. This guy should be a veteran (aka old guy :-) in this industry, he smiled  as the VP greeted him.

VP- ' Hi , I am xxxx. Please be seated'

Rajesh - ' Hello..... Thanks'

VP- ' Your profile looks awesome and the comments of the interviewers, impressive'