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Saturday, July 17, 2010

Saral Gyan - 15% @ 90 DAYS

15% 90D

Starting August 2010, Saral Gyan team of equity analysts will select a particular stock from BSE 500 Index based on technical & fundamental stock analysis. Objective of right stock selection backed with indepth analysis is to ensure returns of 15% (excluding brokerage) within a period of 90 days for our investors.

Equity analysts team will recommend a stock with buying & target price on monthly basis and target price to buying price will be evaluated based on technicals with an upward range of 16% to 20%.

Why 15% @ 90 DAYS?

Many people believe that buy and hold is the best strategy to employ for the long term.

However, over a period of couple of months, a person who buys 100 XYZ shares at 100 each, sees them rise to 120, sees them decline to 85, and then rise back up to 115, he is not getting an overall return as good as he thinks.

What he has lost is the opportunity cost associated with the down period of time.

However, the return over the same period would have been much greater, if the investor had sold the securities and then bought them back at a lower price.

This works whether the investor takes the cash proceeds from the sale and puts them to work in a savings account, or for any other investment.

In real life, the investor would not sell exactly at the top and he would not buy exactly at the bottom. He would sell below the top and buy above the bottom.

Nevertheless, the return is still superior to the buy and hold strategy.

How 15% @ 90 DAYS works?

15% @ 90 DAYS works on Buy to Sell & Gain Strategy for short term as well as long term investors.

An individual as an investor will buy shares based on the recommendation every month and sell them once target price is achieved within expected time frame of 90 days, he/she needs to sell entire his/her holdings to book profits and use the same principal sum invested earlier to buy the next recommended stock.

Hence, using minimum capital requirement, one can keep on realizing the profits at regular time intervals. Needless to say, these stocks would not be part of long term portfolio as the basic objective of investments is booking profits in short term.

Does 15% @ 90 DAYS service delivers returns during market correction?

You do agree that fundamentally good stocks also experience downward move during market corrections. Stock market offers risks along with rewards, that is one of the reason why 15% @ 90 DAYS buy calls will be based on technical chart patterns to ensure limited downside risk. Hence if target price is not achieved in 90 days due to market correction, stock may not tumble down heavily to shrink your working capital.

Benefits of 15% @ 90 DAYS

Returns could be as higher as 75% on Invested sum at the end of the year.

Assuming all 10 stocks recommendation out of 12 in a year hits their target price, an investor will gain almost 75% returns on invested capital with equal amount of investment.

As shown in illustration below, investment of 1000 Rs on monthly basis will yield total profit of 1500 Rs with invested capital of 2000 at the end of the year considering target price is achieved for 10 recommendations out of 12.

(Click on the image for enlarge view)

Limited Capital requirement

The capital invested will be free to invest again once investor books profits on previous investments. Hence, this will be a different way to increase wealth all together for long term investors.

Rupee Cost Averaging

During market corrections, instead of hitting target price recommended stock may fall in next 90 days. Team of Saral Gyan equity analysts may recommend the same stock four months down the line to bring down your average cost, this will help to achieve 15% @ 90 DAYS in next round of your investment for the same scrip.

Note: In case of any queries & suggestions, please write to us at .