Thursday, December 14, 2006

 

Stock market update 13 Dec 2006

It looks like investing in the India stock market seems to require ice running through one's body instead of blood and a very steady heart. We have had a sudden crash happen over 2 days a couple of days back, and you suddenly have experts coming out of the woodwork claiming that they forecasted the crash. I would not think that this is something unexpected, given that every body has been claiming that there needs to be a correction, and that it could happen anytime. So there is not a great deal to claim credit for. And this is not the first time that it has happened, a crash has happened enough frequently that it is no longer unknown.
In my case, the viewing of the portfolio after the crash of the second day left the market down by around 1000 points was painful, but I expected to see the values that I saw. It has not fully recovered, but the last 2 trading sessions were good, and prices are slowly recovering. It helps that I have weeded out some of the more risky ones, and even the mid-caps that I know fared decently (meaning that they did not drop like a stone).
What has not recovered is overall condition of Mutual Funds. They are fairly down, and will take a few more sessions to recover. This is actually something that is not so clear to me. I would expect the Mutual Funds to fall less and recover faster than my portfolio, but that does not seem to have happened to my portfolio. Maybe there is something that I am not understanding.

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