Tuesday, October 28, 2008

Where is the Stock Market headed?

Where is the Stock Market headed? That is a billion dollar question everyone has in mind for which most of the experts have bitten their tongue answering! It is way to difficult - alomost impossible for analyst to predict the outcome in a session - stock markets around the world falling like crazy for the last 3-4 months. There was talk of recession and slowdown but noone predicted such sharp decline.

Will Diwali bring any cheer to the stock market? Really cannot say. Yesterday, 8000 level on Sensex was breached which most analysts thought would not be breached and were recommending buying at around 8000 levels. Now some of the analysts are predicting 6000 levels. I think no one is sure of the floor and the timeframe in which buying support will come. What happened yesterday was carnage and a big see saw of 1500 points. Earlier FIIs were selling stocks - now it looks like Mutual funds have also oined the carnage. Unless confidence is instilled in the markets that there is good buyer support, stock markets can go through further pain. HNIs, Retail and Mutual fund investors are sitting on the sidelines with cash as they don't know what the bottom is and when the buyer support will come. Right now since the FIIs are withdrawing money to pay off their debt in their country, the stock markets are falling. But once they are done - and hopefully they are done soom - then we could see mutual funds and HNIs entering into stock market as then the bottom could be near. There is a caveat though - if before that happens, investors start withdrawing funds from mutual funds then it could spiral into another downturn for the markets.

So, what should small investor do? Sit on the sidelines and watch like an eagle. Right now the opportunity does not exist for small investor unless the person is comitted to a very long term. Watch out this blog for tips and timeframe when to invest!

0 comments:

Post a Comment