Now that market appears to be turning around, we are thinking of investing but where should we start? So many funds and so many stocks.... damn confusing! Lot of information on internet but where is the explanation of why!!! HELP Please...
We assume that you have read earlier blog post and has some understanding as to why we believe that market is in process of turning around. If not then we will encourage you to read previous blog post for better market understanding.
The focus of this article is to provide a quick technique in selection of mutual fund along with individual stock selection using various methods.
Lets take a look at various BSE Indexes performance:
The focus of this article is to provide a quick technique in selection of mutual fund along with individual stock selection using various methods.
Lets take a look at various BSE Indexes performance:
It is clearly evident that if we compare 1 year price performance then BSE Auto index is ahead of every other index, however price performance in last 3 months tells a different story. As market is rallying in past 3 months, it appears that BSE Realty index, BSE Capital Goods index and BSE Bank index are in top 3 positions.
Going forward if this rally continues and market goes on to make NEW HIGH then these 3 indexes will have higher probability of performing over other indexes in the group. This in turn also tells us we should watch best performing stocks in these indexes to find good candidates while investing in individual stocks.
Use a good mutual fund screen-er tool to find right funds:As a good practice make sure:
You can check out our page on "How to select Mutual Funds?" for detail information.
How to select individual stocks?
Quick techniques:
We hope this helps... good luck!
Going forward if this rally continues and market goes on to make NEW HIGH then these 3 indexes will have higher probability of performing over other indexes in the group. This in turn also tells us we should watch best performing stocks in these indexes to find good candidates while investing in individual stocks.
Use a good mutual fund screen-er tool to find right funds:As a good practice make sure:
- Fund age is more than 10 years
- Good rated fund
- Expense ratio is equal to or less than 2%
- Go for Equity funds
- Do not select more than 3 funds as you will be diversified enough by allocating your funds in 3 different funds
You can check out our page on "How to select Mutual Funds?" for detail information.
How to select individual stocks?
Quick techniques:
- Search for stocks which are with in 15% of there all time high
- Search for stocks which have performed more than 200% in a year and currently under going consolidation
- Easy method is to check for stocks in above TOP 3 indexes for best candidates
- Stock price is not under Rs.10/-
- Stock average volume on daily basis is more than 10,000
- Stock is in an up trending channel for last 2-3 months
- Stock earnings are not in next 21 days
We hope this helps... good luck!