Best Investment Strategy in this highly volatile market

Post on: 20 Июнь, 2015 No Comment

During the last 2 months (August-September,2013) Indian equity market remained the most volatile.In the month of August itself,Sensex crashed nearly 2,000 points,dips below 18,000 and bounced back to reach 20,000+ level in September within just 10-15 days Investors are confused with such high swings in the market. Many of my members are asking for the best investment strategy to gain the most from this volatility. In fact volatile market offers the best investment opportunity.Before mentioning the best investment strategy,I want to focus on the following 2 points-

Sensex will reach 23,000+ level within December,2014. (Most probably no other analyst make such prediction till date)
Market will remain highly volatile for the next 3-4 months . Thus it will offer some golden investment opportunity at every downfall. (I am telling the same from August,2013 repeatedly to my clients)

To sum up Mr.Market is preparing its base for the next bull run. Those who will stay invested at least for the next 1 year will gain the most. So,its time to go for bargain hunting. Its time to build-up your solid portfolio with fundamentally strong stocks. Here comes the two most important question-

Which stocks to choose. How to separate a fundamentally strong stock from others?
What should be the best investment strategy?

As this article is open to all here, I cant mention the names of stock with huge return potential. All I can say that all my recommended stocks are fundamentally strong with good earning visibility in future and ready to generate huge return within 2014.(Paid Members can check all recommended stocks after log-in)

This article is more focused on the best investment strategy to gain the most from this volatile market.

Best Investment Strategy -

First of all follow some To-Do list-

Dont invest when Sensex is above 20,000 level. (Applicable for the next 1-2 months only)
Be greedy to invest in stocks when Sensex falls below 19,000 level. (Applicable for the next 1-2 months only)

Let me tell you that most TV-analyst will exactly tell the opposite. Follow CNBC or ET Now or any financial channels, when market falls all those analyst express their highly negative view on the market and avoid investors to enter. Those same people turns highly optimistic when market is on rise and instruct investors to enter in stocks. Latest example,just 1 month back during August,2013 while Sensex crashed around 2,000 points within few days,those TV-analyst regularly used to say,Market will fall more,economy will deteriorate further dont invest. Just after 10 days of such comments,market takes a U-turn,gained around 10% within few days.Now,those same people are advising investors to enter the market. Due to such nasty practice several small investors are trapped to buy stocks at higher level.Moreover many of them book loss at lower level. The realty is Companys fundamental never change in such short duration.Only stock price over-reacts in the both direction. As an investor you should take the opportunity of such wild swing. Analyst,those who always predict short-term market movement, are always ready to confuse you. Dont listen to them,dont bother about where the market is heading in the coming 2-3 month. Concentrate on particular stock,follow that Company and adopt the best investment strategy which I am going to mention.

Best Investment Strategy to gain from highly volatile market -

First of all decide how much you want to invest in stocks for the next 2-3 months.
Divide that entire amount into several smaller parts.
Invest each small chunk at every market dips in your pre-selected stocks.Otherwise invest each small chunk whenever your pre-selected stock falls by 3%-5% . As,this article is open for all,here I cant mention any stock with huge future potential. Paid members can log-in to their account to choose those Pre-selected stocks for investment.
In the coming 3-4 months,always be greedy whenever Sensex falls below 19,000 level. Never invest when Sensex is around 20,000 level.(Applicable for next 3-4 months only)
While adopting this strategy keep a long term view(at least 1 year). Always remember no body in this world can create wealth from short-term trading or from futures and options. Those are sure-shot way to lose money.
This simple but highly effective strategy will surely help you to make a better investor in the journey of your long term wealth creation.

Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it. Warren Buffett

Suppose,you are planning to invest Rs-20,000 for the next 2 months.Divide that 20,000 into 10 parts,so each becomes Rs-2,000. Now invest each 2,000 as per the above mentioned way. Remember,nobody can tell you the exact top as well as exact bottom for any stocks within a given time range.Dont waste your time to predict the exact bottom. Whenever market will crash dont try to find out such baseless questions like, How long the market will continue to fall?. If you try to find out such answer,then you will find all on a sudden market takes U-turn and you missed yet another golden investment opportunity.

Follow that simple method. The problem is several investors dont like such simple yet highly effective solution. They are constantly looking for some complex theories or some complex formula to prove themselves Oversmart and try to fool the market. I want to complete this article with the following quotes from Warren Buffett,the worlds most successful investor.

The business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective. Warren Buffett.