Investors in stock markets should go in for long term investment, take the systematic investment plan route, buy index funds, be selective and chose scrips with low debt, said S.Lakshmanraman, Trading Member, Madras Stock Exchange, here on Saturday.
Investors are exposed to market and unsystematic risk and the next trigger will the fourth quarter results and a reduction in interest rate by the Reserve Bank of India, he said speaking on ‘Budget 2012-13- A stock market perspective,' at an investors awareness programme organised by the Madras Stock Exchange here under the auspices of the Securities Market Awareness Campaign of SEBI.
India's long term growth story continues though we are facing headwinds such as a falling GDP, rising fiscal deficit, stubborn inflation, high interest rates and falling rupee. The prevailing environment will lead to high level of market volatility, he said.
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Agriculture, fertilizer, infrastructure and power sectors would benefit from the Union Budget as it offers many concessions to these sectors, he said.
Emphasising the importance of risk management for successful investing, he advised investors to watch macro economic indicators while making investment decisions. V.Nagappan, Director, MSE, gave an overview on ‘Investment in gold and equity through ETF,' and advised investors to go in for ETFs or e-gold when choosing gold as an investment option. However, it was important for investors to have a balanced exposure and proper asset allocation, he said.
He also disclosed that the MSE would start a programme for new entrants to stock markets from next month.
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S.Venkateswaran, Director, MSE, also spoke.