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Sunday, February 6, 2011

Nifty Breaches 5400 - Will You Buy Stocks Now?

In the last day of closing weak, the 30-share BSE Sensex plunged 441.16 points or 2.39%, to close at 18,008.15 and the 50-share NSE Nifty tanked 131 points or 2.37%, to settle at 5,395.75.

As been generally observed, the Indian retail investors enter the market when the market is in momentum, at it's peak and when they find people talking about stocks at every nook and corner, while they shy away from the market when the stocks are down and the valuations are tempting. The same old story repeats every now and then with Indian retail investors finding themselves at the wrong side of the market.

We experienced the same with our subscription services Hidden Gems & Value Picks, we got the maximum subscribers last year during festive season of Diwali, Sensex during that period was at 21,000 level and retail participation was back in primary market with listing of IPOs like Coal India and MOIL. The same has been observed in secondary market too. Many new investors get into stock market on highs by looking at stock prices moving up on daily basis.

We always keep on telling our readers not to consider stock market as quick cash generating machine, one needs to take a long term view and keep building his stock portfolio with a mix of large, mid and small cap stocks when stocks valuations become attractive (consider recent market correction) and offer good value on your investment. Considering current scenario, Indian stock market sentiments turned weak because of negative factors which literally hit hard the confidence of foreign institutional investors. Housing Loan & 2G scam, rising inflation, rise in interest rates are the factors which could not be ignored by investors fraterniy.

As Sensex & Nifty has corrected by almost 15% from their highs in Nov 2010, we suggest our subscribers to start buying stocks in small quantities. Stock market can see correction of another 5 to 8 % but adding good stock in small quantities at every dip can prove to be a good strategy for medium to long term investors.  As you know, no one can exactly time the market and its always good to buy stocks in a systematic way during such fall in stock prices. Many small cap stocks are available at mouth watering evaluations and turn to be multibaggers in next 2 to 3 years. Dip in stock prices due to recent correction is giving an opportunity to grab such Hidden Gems.

Even after major correction in stock prices, our stock recommended as Hidden Gem - Jan 2011 is trading above its recommended price. Saral Gyan equity analysts firmly believe that the stock recommended as Hidden Gem in Jan 2011 have the potential to give 10 times returns in next 3 years. We already sent the complete research report to all our paid subscribers and suggested them to start accumulating this stock in small quantities keeping a long term view of 2 to 3 years. We believe that from current levels, major index like Nifty and Sensex can yield returns of 17 to 20 % in one year and small cap and mid cap stocks can outperform Nifty & Sensex during the same period.

Note: Saral Gyan offers Hidden Gems, Value Picks & 15% @ 90 DAYS annual subscription services, click here to know more about our subscription charges and payment facilities.