Strategies for stock market investors in 2012
Stock market conditions keep on changing every minute. Here, our experts have made some best predictions about market condition in 2012.
How to invest in share market in 2012
Last year, stock market was not in favor of investors. Eurozone crisis, economic slowdown in India and government's laziness on policy, etc are problems faced by investors in 2011. The conditions of market are not very good in 2012 also. Our experts believe that stock market can be under pressure even in this year. But this does not mean that investors should keep a distance from stock market. You just need to step forward in stock market with care so that you can get the maximum return at the times of bull market conditions. Here are some stock market predictions in 2012 and tips for share market condition in 2012.
In 2011, most of the shares of infrastructure and real estate sector had very poor performance. Most of the investors believe that the shares of these sectors are now cheaper due to heavy downfall. Thus it is good to purchase them. Infact, it is suggested to consider only price of shares to purchase them. You need to consider many other aspects like how is the business performance of a company? This determines its share valuation. Thus, stock price cannot be the scale for valuation. Investors should make a deep research before purchasing shares of any company. They should foresee the business performance of the company in future and how much it depends on government policies (since government policies are tending to change after a time interval). Investors should also investigate the track record of management while purchasing shares.
Tip 2:
Stock market will keep fluctuating in 2012 also. Generally, investors get upset at the times of bear market conditions especially when the price of reputed companies fall down. But investors should not take any decision with the performance of a share in short term. Thus you should not sell your shares in hassle due to bear market conditions. Most of the shares take a U-turn after some time.
Tip 3:
Some investor take help of Systematic Investment Plan (SIP) to invest in equity mutual fund and Exchange Traded Fund (ETF). In SIP, you invest a predetermined amount in stock market. It has lower risk. Most of the people are confused whether to continue SIP in bear market conditions or not. The answer is that it is not possible for an investor to purchase shares at cheapest price and to sell them at highest price. If you discontinue SIP in poor conditions, then you will lose the benefits from systematic investment.
Take support of asset allocation. This will reduce your risks in investment. You can invest in equity fund, date fund or gold fund. Allocation as 50% asset in equity, 40% asset in date fund and 10% asset in gold fund is best.