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Friday, August 19, 2011

Stock markets crashing – what to do?

As an HDFC Mutual Fund investor, I recently received a message of advice from CIO of HDFC asset management company. I liked the message in which he has said “It is always darkest before dawn“. Here is the original message for the benefit of all Indian Stocks News readers.

HDFC CIO Message on Investing in Crisis 2011

The bottom line of the message:
Good returns materialize over time on investments made at cheap valuations (meaning low PEs) and PEs are more likely to be low when the news flow is adverse.

What should you do?

Looking at all the negative developments on front of global economy, Indian Stock Markets are entering into very lucrative and attractive stock valuation zone. The fact that SENSEX, at 16800 levels is trading at 13 PE (1 year forward) highlights the attractive valuations.

With today’s fall in SENSEX at 16469 and the fall that we may witness today i.e. on 19th August due to steep fall in American stock markets today would take it to even more attractive stock valuations.

I strongly believe one may buy stocks in small chunks if SENSEX goes below 16000 levels as it would be real value investing for long term investment portfolio.

2 comments:

  1. relience industries, icici bank, mahendra satyam,gmr infra, gtl infra, unitec,hcc,indswift,alembic,titan,ashok layland,sail,r power, r com, nhpc

    ReplyDelete
  2. tata motors,sbi,bhel,sun pharma

    ReplyDelete

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