Stocks - Strategy

• Coping with volatility
Stock markets have become extremely volatile. So how do you survive?

• Managing long-term savings to create wealth
Time and again research proves that equities is the best weapon to combat inflation and the most rewarding asset class. Hence, when investing for long-term objectives like retirement, you should probably allocate a large chunk of assets to stocks for the growth they can provide over time.

• What will impact the market?
The last week was bad for all equity investors with panic gripping Dalal Street as they emerged scared and hurt. Greed seems dead now and fear overpowers all sentiment. How will the market behave in the next few weeks?

• Analysts upbeat over cement sector prospects
The cement industry has been posting a double-digit growth rate in the last couple of months. Moreover, it has turned very attractive at current levels with the recent fall in cyclicals.

• Lessons from the crash
The Sensex might have lost 20% in just over a month, but it was the retail investor who bore the major brunt of the plunge. Here are a few lessons to learn from the bloodbath.

• Bargaining for a good fare
A lot of good companies in the pharmaceutical, fast moving consumer goods and manufacturing sectors have been beaten down to rock-bottom levels. The time seems ripe to buy stocks that are available cheap.

• Efficiency matters
The stock market attaches a premium to companies that have a low requirement of working capital, as they are less liable to get trapped in a morass even during an emergency. A company with a high working capital turnover ratio vis-a-vis peers ends up getting a higher valuation or a better price-earnings ratio.

• How to manage your equity investments
During 1994-1999 when returns from the stock market were most depressing, it was perhaps understandable that most investors focused on the risk part of the Risk-Reward Equation (high risk = high rewards). If the market sustains its momentum, the reverse will be true when investors tend to go overboard on equities. It is at these times that you should understand how to manage your equities, and the risks and rewards of investing in common stocks

• Beating the pro
Amateur stock pickers would have a much higher opinion of their abilities, as well as a greater net worth, if they avoided all expert buy recommendations in favour of their own research.