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Currently, the economies across the world are facing a challenging time. The reflection of the same can be seen across the widespread correction in stock markets in India.

However, corrections or bear markets are nothing new to the stock markets in India. The reasons may vary though, with the most common reason being overstretched valuations.

The year 2008 was considered as one of the worst years for stock market investors worldwide.

That record broke this year! 

Stock markets have witnessed their worst mayhems with never before seen market corrections and indices hitting lower circuits repeatedly in March 2020 due to escalating fears of the global pandemic caused by the Coronavirus.

Amidst these series of market corrections, in between, there have been some moments of recovery too triggered by news of government announcing economic stimulus, rate cuts and vaccination trials.

Only time will tell whether the number of Coronavirus cases will escalate further or tone down.

At this point, most share market investors are facing a common dilemma. 

Is it time to do bottom fishing? Or Is it time to wait on the sidelines and watch patiently as there could be new lows?

To answer the above questions, let\’s take a look at the two possibilities and their possible outcomes.

Situation 1: The pandemic is under control.

Outcome: Undoubtedly, the economy and markets will recover in some time.

Situation 2: The pandemic worsens.

Outcome: Some countries may experience recession and markets will correct further. Even in the worst-case scenario of the two situations mentioned above, one should not forget that the world has been through difficult times before as well. Take for example, the burst of IT bubble in early 2000 and SARS epidemic of 2002-2004.

And who can forget the global financial crisis of 2008 fuelled by the American subprime crisis?

Coincidently two of the biggest crashes in the stock markets in India too happened around the same time.

Check out the below charts.

Chart 1

From a high of 5,933 points on 11th Feb 2000, Sensex corrected to a low of 2,667 on 26th Sep 2001 and remained subdued over the next two years. However, as seen in the above chart, stock markets in India not only recovered by Jan 2004 but also touched new highs. 

Chart 2

From a high of 20,869 points on 08th Jan 2008, Sensex corrected to a low of 8,160 on 09th March 2009. But despite the global liquidity crunch, the stock markets not only recovered by Nov 2010 but also touched new highs.           

In both the above cases, the recovery period was around 1 to 2 years.

Now coming back to the current situation, till the time the dust settles over the Coronavirus, stock markets are going to experience extreme volatility.

Here’s what you can do as a share market investor:

Remain invested to tide over stock volatility

The current value of your investment may have gone down significantly. But remember it is only a notional loss. Don’t make the mistake of turning it into real losses by selling it off.

Invest in the stock market in tranches to overcome stock volatility

If you have some amount handy for investment, don’t invest it at one go. Invest it in systematic tranches so that you can make the best use of this current market volatility. Also, invest with a long term horizon of 3 years and above.

Invest only in excellent quality stocks to overcome stock volatility

Stock markets have corrected a lot in the last month. We can also see the prices (and not value) of many fundamentally sound businesses going down. But that does not mean the fundamentals of quality stocks have changed in any manner? Any company that is well-managed and has an established business model with consistent growth in revenues will continue to do so when the economic climate is favourable again. Read more about how you can identify fundamentally sound stocks.

Become an informed investor to overcome stock volatility

Last but not least, use this time wisely to invest in knowledge. Remember, stock prices are driven by the fundamentals of the company behind the stock in the long run. So, try to understand and learn the parameters which make a stock fundamentally sound and why fundamentally sound stocks can survive any volatility and emerge triumphantly with time.

At the height of the global financial crisis of 2008, when stock markets across the globe were crashing badly, and panic-struck investors were selling stocks like there was no tomorrow, there was one stock market investor who was buying stocks. It was none other than Warren Buffett.

Buffett revealed his rationale behind investing at that point of time when all others were selling. In an article on the New York Times dated 16^th Oct 2008, he quoted, “The financial world is a mess, both in the United States and abroad. Its problems, moreover, have been leaking into the general economy, and the leaks are now turning into a gusher. In the near term, unemployment will rise, business activity will falter, and headlines will continue to be scary. So…I’ve been buying American stocks.”

The current situation looks familiar isn’t it? Scary headlines…crashing markets.

As mentioned before, these are testing times, but we’ll pass through them. And we’ve started witnessing a recovery in stock markets in India, presenting a moment of ample opportunities for investors to create wealth. Know more about them here.

Before taking any decision, keep two facts in mind:

1. This pandemic will pass.
2. The markets will rebound as it has from SARS, Ebola, Swine Flu, or any other crisis.

Read more:  How Long-term investing helps create life-changing wealth – TOI. 

We all are pressed for time, especially when it relates to balancing family and professional life alike.

Take my example being a person employed in a great organization that respects its clients and its employees alike. The only issue (If there is one) is the travelling in Mumbai, specifically between my office and home. To share, I stay at Kandivli, and my office is around 33 kms away from my house.

Travelling to the office is nothing less than an adventure

It involves me to jump on an auto-rickshaw, then to a local train and then to an auto-rickshaw again to reach the office.

Oh, the ordeal here is generally 1.5 hours on an average.

The stop where I board my train for a long journey back home often is jostling with passengers carrying their office bags like a soldier would have done in any action movie. It amazes me the swiftness with which they get onboard, hunt for a seat and by the time I join the chaos, they had already started reading the important chat that they continued before the local train came!

Now can I be as swift as them, probably not because I am not getting any younger these days!
I guess I have gotten used to the routine because I know that\’s the way life is-until recently I noticed someone do something that made my life a little more, can we say \”comforting\”!

This is where a woman in her mid-50s taught me the lesson that I needed otherwise as well (for my investing). Become a contrarian while investing in the Indian stock market!

So, she would board the local train going two stops the opposite direction! When the train from the end station arrived 22-24 minutes later, she would be seated comfortably without a sweat on her face and be very happy! The cost was built in already as it was a season ticket, so it was budgeting the time reaching home happier, I guess!

This is what I have learnt with the current equities\’ scenario & markets as well.

A valuable lesson which I learnt from this while investing in the Indian stock market

I know that the levels of 8,000-8,400 (Nifty) are where I am, waiting to board a TRAIN that will take me to the destination – my home of 14000 levels (this will change as we go along). But the point is that when the train comes for boarding (the Indian stock markets turning happier), that is when the market TURNS GREEN, the people who jump in will not give me a chance to board and I may have to be pushed around, thrown out battered waiting for the next one, and the next one.

That\’s what the revival trend will mean any day now. I may not have the chance to board the TRAIN on its journey towards 13,500-14,000 levels!!

So, what do I do?? Since I have bought a season ticket, which is the RIGHT to invest for myself and my loved ones, I will board the train but in the opposite direction that is at levels of 8,000-8,400. Actually, many smart people are boarding at these levels along with me as well!  To invest in quality stocks trading at bargain prices click here.

I will come back and ZIP through the same local station but in a FAST-LOCAL train this time with a seat that I prefer! That\’s where I will have time to pick a seat of my choice (=stocks) and a train of my liking (=markets).

See, I told you- LIFE TEACHES ONE A LOT!!

Happy riding, happy investing!!

Read more:  How Long-term investing helps create life-changing wealth – TOI. 

Share markets in India and share prices never move in a straight line.

Ever noticed this?

Yes, it is indeed a fact and this happens because of market volatility. Check out the below graph of Nifty 50 for a 5 year period ranging from June 2016 to June 2021.

In the above graph, it is quite evident that over the long term, markets are eventually going up, but in between, there are some hiccups, i.e., corrections.

So, what does this mean?

It simply means every correction in the share prices offers an opportunity for an investor to buy more at discounted prices.

It simply means every correction in the share market in India is an opportunity for an investor to buy more discounted prices.

Consider it as a sale at your favorite store. Now, what would do we usually do when we come across a 30% or 40% or even 50% or more sale on our favorite brands?

The obvious answer is to buy more. Isn’t it?

The same principle applies in the share market in India too. However, what happens, in reality, is just the opposite.

Most share market investors panic at first sight of correction and end up selling their stocks for losses.

“In the middle of difficulty lies opportunity” – Albert Einstein.

As mentioned earlier, investors who look at market correction as an opportunity to buy stocks trading below their intrinsic value can create significant wealth.

Through this article, let’s take a detailed look at:

A) How stock market volatility gives rise to imperfections in share prices resulting in mispriced opportunities?

B) How Research & Ranking can help you in identifying and investing in shares trading below their intrinsic value?

C) How to gain from fluctuating share prices by investing in current mispriced opportunities in the market?

Wish to Know More About Current Mispriced Opportunities in the Market?

A) How stock market volatility gives rise to imperfections in share prices resulting in mispriced opportunities?

Share prices depend on multiple factors, but the most primary consideration is the number of buyers and sellers.  When there is a high demand for a stock, i.e. a high number of buyers the price of the stock is bound to increase on the other hand when there is a low demand for a stock, i.e. a high number of sellers, the share price is bound to decrease.

In the long term stock prices of companies listed in the share market in India are decided on the basis of the earnings of the company.

When a company does well in terms of sales and revenue, the value of the company is ultimately reflected in its share prices.

However, in the short term share prices are influenced by multiple factors such as political, global instability, rise in oil prices, terrorist attacks, the threat of armed conflicts, etc. to name a few.

To help better understand this, let’s take a look at a few examples from the past below:

Example 1

On 14th September 2019, Saudi Arabia’s two major oil plants were attacked by armed drones reducing almost 50 percent of the country’s global crude supply. This led to escalations of tensions in the Gulf region with America blaming Iran for the attack.

Spooked by the threat of potential escalation leading to armed conflict in the Gulf region, the share markets in India corrected sharply with Nifty falling by almost 300 points over the week. However, in less than a week, the Indian share markets not only recovered but touched new highs with the Nifty touching 11,600 levels.

Now here we have used the example of Nifty 50 as it represents the weighted average of 50 Indian company stocks in 13 sectors and is one of the leading stock index benchmarks used in India.

Example 2

Post the announcement of the FPI surcharge in Budget 2019, Foreign Portfolio Investors (FPI’s) & Foreign Institutional Investors (FII’s) who have been one of the biggest drivers of the share market in India started selling stocks.

This resulted in a free fall in the Indian markets with the benchmark Nifty 50 correcting from 11,788 in June 2019 to 11,023 in Aug 2019. However, post the rollback of the FPI surcharge by the government the benchmark index Nifty 50 bounced back quickly and touched 11,877 in October 2019.

The above two examples are the latest ones. However, if one looks back in history, there are many such examples of market correction triggered by domestic and global events which have resulted in a significant correction in share prices.

An important point for an investor to note here is that irrespective of the correction in stock market indices and share prices there are no fundamental changes in good quality stocks.

For example, if the stock price of a company that is fundamentally sound in terms of consistently growing revenues, is well managed, has low or zero debt, and has a scalable business model, corrects as a part of the overall market correction due to temporary domestic or global events but has a potential to bounce back in the foreseeable future, thereby delivering good returns in the medium term.

Example 3

On March 23rd, 2020 Indian benchmark indices the Sensex and Nifty touched their yearly lows a correction of almost 35-40% from their yearly highs achieved in January 2020 due to rising fears of Coronavirus cases and a slowdown in the economy due to lockdown. But markets brushed off these fears and have touched new highs.

Now that you have a clear picture of how corrections in the stock market in India can give rise to stock price imperfections let’s take a look at the second and most important part, i.e. identifying those mispriced opportunities.

B) How Research & Ranking can help you in identifying and investing in shares trading below their intrinsic value?

Using a winning combination of technology and in-depth research, our team of experts will identify those fundamentally sound stocks which are trading below their intrinsic value and have the potential to multiply investor wealth by 25-50% over the next 6-18 months.

Past Success Stories Of High Growth Stocks Recommended

Company Name	Buying Price	Exit Price	Duration	Gain in %
Hero MotoCorp	₹ 1806	₹ 2361	40 Days	31%
Kansai Nerolac Paints	₹ 360	₹ 463	41 Days	29%
Emami	₹ 310	₹ 360	8 Months	16%
Varun Beverages	₹ 688	₹ 974	5 Months	42%
Page Industries	₹ 19101	₹ 27247	4 Months	43%
SBI Card	₹ 700	₹ 611	96 Days	-13%
Endurance Technologies	₹ 1009	₹ 1418	75 Days	41%

So essentially you will receive investment recommendations of 10-12 fundamentally sound businesses; i.e. one stock recommendation each month. However, at times when you may also receive two investment opportunities in a month.

Along with the stock recommendation, Research & Ranking will also provide you with a detailed research report which highlights the rationale behind the analysis and the upside potential of the stock.

It will also include information such as:

• The price range in which recommended stock has to be purchased and exited.
• A short update every six months until the recommendation to exit to track earnings growth/major events in the stock/industry.
• A quarterly fact sheet to capture open and closed positions, profit booked/accrued of the portfolio stocks.
• Alerts via SMS, email & updates on your personalized dashboard and mobile app.

Sounds Exciting? Get Started Now

C) How to gain from fluctuating share prices by investing in current mispriced opportunities in the market?

Step# 1

Sign up for Mispriced Opportunities Strategy by visiting our website.

https://www.researchandranking.com/mispriced-opportunities

In this page, you can view the subscription details of the Mispriced Opportunities Strategy.

You can choose from any of the two subscription plans offered by us for the Mispriced Opportunities Strategy, i.e. one-year subscription for Rs. 28,000 and a five-year subscription for Rs. 1,25,000.

Save Rs.15000 by opting for a 5-year subscription instead of a yearly subscription model.

You can make payments through NEFT/RTGS/IMPS/UPI.

Step# 2

Check registered email for our welcome email.

Once you have made the payment, you will receive a Welcome Email from our customer service from the address createwealth@researchandranking.com containing details such as the link for Research & Ranking dashboard, your username and password to log in.

Step# 3

Visit https://www.dashboard.equentis.com

Enter the registered email address and password to login & update your Profile.

Once you verify your email address and mobile number and complete the mandatory fields, click on I agree to Terms & Conditions and click Submit.

According to SEBI guidelines, it is compulsory to attach your PAN card copy.

So keep it nearby.

You will then be redirected to the Mispriced Opportunities which will appear as below.

Click on Stocks to Buy to view the list of stocks recommended in Mispriced Opportunities Strategy.

In this section, you can see the list of stocks to buy with essential details such as:

• recommendation date
• percentage allocation,
• buying range
• exit range
• current price

Important things to note:

We will recommend only those stocks under Mispriced Opportunities that have passed our stringent fundamental test based on various quantitative and qualitative tests and should fall under one or more of the ten pre-defined categories of events.

Since the returns will be calculated on a portfolio level, you should be investing in all the recommended stocks as per the recommended portfolio allocation.

Research & Ranking will be providing you with an exit on a stock recommended to you even after your subscription period ends.

Any stock recommendation is valid only for the month in which it is recommended or as long as the stock price is within the buying range.

By clicking on Portfolio Details on the Dashboard, you can view your Portfolio and Stock/ Market details.

Investing in the mispriced opportunities in the Indian stock market using the R&R Dashboard is quite simple and can be done in just a few clicks.

At any time if you require any assistance, you contact our support team by clicking on Support.

Alternatively, you can also reach our support team by calling 022 6101 3838 or email us at support@researchandranking.com.

To summarize, Mispriced Opportunities Strategy offers investors an excellent opportunity to capitalize on the fluctuations in share prices by investing in good quality stocks trading below their intrinsic value. Such stocks have very strong fundamentals which can help them outperform with time.

Click here to get started now!

Wish you and your loved ones a very Merry Christmas!

2019 has been a year that taught me a lot. From interacting with investors in person or over phone calls on why long term investing in the share market in India is probably the only way to create wealth and answering repeated queries on whether gloom or doom is going ahead, 2019 was an overall pleasant experience.

There have been a lot of learnings throughout the year. And I have used those learnings to draft my Financial resolutions for 2020 and beyond.

Here’s how I went about thinking about what needs to be done:

I listed down the goals I have for myself over the coming years such as immediate goals, medium-term goals and longer-term goals. My immediate goals include buying myself a professional camera, while my medium-term goals include purchasing a new car in the year 2021. My longer-term goals include buying a bigger home and planning for my retirement to live a similar lifestyle I live now or even better without having to depend on anyone else, etc.).

Then I listed the resources that I would have on hand to achieve those dreams.

Talking of the gaps, I may be able to buy the camera, rather easily. But I may have to think twice before purchasing a new car in 2021. So, it would be better if I start planning now. Thinking of a bigger home and planning for my retirement, my heart told me something – \”Harsh, start finding another full-time job that you can do alongside your current employment.\”

My heart surely knows that isn\’t possible. But what it means is I need to plan a lot of lot better going forward. Here are my Financial Resolutions I will take this New Year:

Adequate Savings:

I will plan my savings in a way that I can surely follow and invest a certain amount by the end of the year. This is extremely important if I want to ensure my family & I get to live a comfortable life in the future and never have to adjust for anything.
Planned Expenses: I will completely avoid impulsive buying – as I say this, I know it is going to be the toughest one to do, but I need to start doing it now – after all, it will have some impact on my finances in the future.

Systematic Investing:

I will ensure I invest my savings wisely. I will not just trust anyone into putting all my savings in 1-2-3 baskets. I will spread them across systematically. I will read, do my bit of research and only once I am satisfied, will I commit to investing my money there. I also need to understand I have different goals/dreams – I need to save and invest accordingly for each of them. E.g., I cannot be allowing myself to buy a new car at the expense of my retirement plans.

Avoid Speculation:

Be it going for speculative investing in share market or being speculative about some rumours or investing based on gut, I will altogether avoid all of it. I will ensure I do not fall into this trap and invest my money systematically. Know more about the perils of investing based on  tips.

Investments don’t need 24×7 surveillance:

I shall invest wisely and also keep a track on my investments, but I shall not monitor them minute-by-minute. Just because there is technology available to do so, doesn\’t mean I misuse it that way. Just because the markets go up and down, I will not indulge in impulsive buying or selling. Read about the importance of patience in stock market investing here.

Invest in health & life Insurance:

Medical bills are rising by the day. I am extremely healthy today, but I do not want to speculate about it for tomorrow. I neither want my health to be a burden, especially a financial burden for anyone. Plus, just in case if something terrible has to happen to me, I need to have enough money for my family not to at least worry about money.

Use my credit cards wisely:

Credit cards offer the convenience of not carrying cash in your wallet when you want to buy things or travel. However, the credit aspect of buy now and pay later sometimes motivates most of us to spend on some things, which we would have otherwise probably not have bought on cash.

Although I use my credit cards very wisely, sometimes I end up missing the payments on time resulting in unnecessary pile up of interest. So, this is one area which I am certainly going to focus on.

Avoid unnecessary shopping:

There is a popular joke doing rounds these days on WhatsApp and Facebook. Here’s the joke “Do you know what is the best way to save money on online shopping portals? Simply uninstall their apps and you will end up saving a lot of money”.

The ease of shopping from the comfort of our homes or office in few swipes has most of us buy a lot of things we probably even don’t need or hardly use. I personally bought many things which I hardly use and this has made me realize the pitfalls of impulsive shopping. Not only do these unnecessary goods eat up your money, but also clutter your house. So, I have decided to strictly buy only those things I need especially when it comes to online shopping.

Easier said than done is what I\’ve heard. But if I can\’t help myself, who else will?

Read more: About Research and Ranking.

We often come across people saying:

“I want to go to Europe/Switzerland for a vacation.”

 “I want to buy luxury car.”

“I want to buy my own house.”

Can you guess what’s common among the above statements? The answer is desire. And what is stopping people from achieving these desires is the lack of money. We all have desires, and the list is endless.

Let’s take a look at some financial goals where lack of money is often the biggest hurdle:

Buying your dream house

Have you been thinking of buying your own home? A bungalow with a garden or an apartment with facilities like a clubhouse and a swimming pool? But practically are you finding it difficult to afford even a one-bedroom house in your town? Forget private villas or an apartment overlooking the sea, even a one-bedroom house in major cities costs a lot. The idea of a dream home may vary from person to person, but money is the common deciding factor.

Property prices have increased manifold in the last few years and not showing any signs of coming down. Buying your dream home can be a costly affair as banks do not lend more than 75-85% of the value of the property, and you have to make a lump sum down payment. A major portion of your life savings will be used up to make this payment and secure the home loan.

Saving for your child’s future

Dreaming of sending your child abroad for higher education? That’s an excellent thought. However, it will cost you a lot, though. A 2 year MBA course in a top international university will cost you approximately 1.01 crores today. Forget foreign education, an MBA course in a prestigious college in India itself would cost you around 10 to 20 lacs. It estimated with the current scenario that the average cost of an MBA degree would be about 50-60 lacs by the year 2035. The cost of an engineering degree is expected to touch approximately 25-30 lacs by the year 2035.

Saving for a happy retirement

Retirement is a time to enjoy life without worrying about money. It is the time when you can take up your hobbies or follow your passions. When you retire, your daily commute to work stops, and so does your income. To have a comfortable life post-retirement, one needs to start saving early and regularly.

Can you compromise on any of these long term goals? The answer is simply no.

Setting financial goals gives you long-term vision and motivation. It is equally important to have a plan to achieve your financial goals. The common factors among all the above purposes is long-time period and the requirement for a considerable corpus fund. It is virtually impossible to accumulate such a huge corpus fund by investing in traditional instruments. Short term goals like buying a car or an exotic vacation can either postponed or avoided altogether, whereas long term goals are entirely unavoidable. 

Equity investment is the best way to achieve your long term financial goals

Fixed income investments, such as fixed deposits, post office deposits, savings certificates etc. offer marginal returns ranging between 6-7% yearly, as per current interest rates and lack the power to increase your wealth or beat inflation. On the other hand, when you invest in stocks, you are investing in the growth of a company. So, over a more extended period, your money will also grow along with the company and deliver returns which can easily beat inflation.Read more about growth and value investing here.

The biggest secret of wealth creation is investing regularly in good quality stocks of well-managed companies with sound business fundamentals. Such stocks are safe from temporary ups and downs in the stock market and will always deliver handsome returns to investors in the long term.Know more about factors to look while choosing quality stocks here.

A wish without an action plan is simply a wish.  One can either keep complaining about the lack of money or take a positive step towards wealth creation by investing in equity. And believe it or not, the best time is now.

Read more:  How Long-term investing helps create life-changing wealth – TOI.