Stocks or MF in a choppy market
Posted on: May 7, 2008 - 7:27am
Stocks or MF in a choppy market
During a rising or a falling market, its comparatively easy to decide which stock to go in for. But when it comes to Indian stock markets, it becomes quite a headache.
If you are a novice to the stock markets, you do not know exactly what to look out for as indicators. The end result is that you 'gamble" money without knowing exactly what you are doing.
The situation becomes more difficult when the market is choppy. That is, one day you see the sensex soar and the very next day, you see it nose-dive.
So, would you go in for a safer bet with Mutual Funds or will you stick with shares?
This question shrouds most people who are new to the stock market.
What is your opinion?
Hi Financeman,
Market fluctuations are the nature of the stock market beast, whether it be stocks or MF's. Personally I sold my mutual funds due to the fact that the management expense ratio's (mer's) are excessive and a waste of money imo. Paying someone to lose money for you adds additional insult to injury. My preference is to invest in common shares via discount internet trading accounts.
The sensex has had quite the selloff from it's 12 month high. Going forward, history will prove this to be an excellent buying opportunity. A mere blip on the march to higher highs as India continues her inevitable economic expansion. Investors who experience stock market jitters should consider options to limit portfolio risk. I recommend either selling calls (pocket collected premium) or buy puts as insurance in declining markets.