Analysis of Equity Funds in 'Bear' Market

[Venkat123]

The U.S. economy is the largest national economy in the world, with a nominal 2006 gross domestic product (GDP) of more than US$13 trillion (over 19% of the world total).

The US is going through a consumer led recession. Consumer spending makes up 70% of US GDP!

While the US market was correcting, India's market was setting new records. The peak was clearly visible. There is no decoupling.

[life2007]

Good piece of information again MR. INDIA !!! Thanks

Originally Posted by mrindia

The stretegy of selling MFs at high NAV before mkt 'starts falling' & again repurchasing these whent NAV reaches its 'lowest' sounds theoretically interesting, but the fudamental on which its placed it totally unpredictable. i.e only issue is that nobody can predict which side the mkt is heading & to what extent it may go. You already know this answer, but i fear its the only answer
Your smart move may bite the dust if your calculations/speculation goes wrong. Any type of trading in volatile mkt is a wrong advice.
And remember, we are trading in mutual funds not stocks. We are paying huge ammount to "Fund Manager" to scratch his head in bull n bear run as well. So, in downslide, its fund managers skill to buy/hold/sell the stocks to deliver returns comes into picture. He is the person who decides what stocks to buy or sell. Collective aim is to give risk free returns.
No doubt NAV is also dependent on stock's performence, but every MF/Stock will be red in bear phase. Good funds register lesser losses during fall but loss is still there.
So in stocks/MFs, whosoever may time the market (thats mere by chance)feels himself a smart player
MFs due to large no of stocks in there folio are still less risky c.f stocks.

keep writing!

mr india

[reufra]

Hello everybody,

I had invested in SBI Magnum tax gain MF.When i invested the NAV value was around 54 Rs.Last month it was around 67 Rs.Due to the current market crash the NAV value has come down to around 59 now.I had opted for "DIVIDENT" option.

Iam now thinking to invest some more amount in the same fund.I am in the assumption that i would get more units if i purchase now as the NAV value has come down by 9 Rs.Does that make sense?.Can some body suggest on my decision?

[life2007]

OH!! Mr. Venkat... That was too much for me to digest , GDPs, Economy etc etc

Sometimes, you laugh along with others even if you have not understood the joke just to make sure that other people do not treat you to be fool. So, dont treat me a dumb, I am laughing

I am scratching my head [still scratching ] how it is related with the subject question.

But thanks anyway for the input.

Hey !! Just putting some lighter moments in this otherwise a forum of serious things in life.. I hope you wont mind

Regards

Jeet

Originally Posted by Venkat123

The U.S. economy is the largest national economy in the world, with a nominal 2006 gross domestic product (GDP) of more than US$13 trillion (over 19% of the world total).

The US is going through a consumer led recession. Consumer spending makes up 70% of US GDP!

While the US market was correcting, India's market was setting new records. The peak was clearly visible. There is no decoupling.

[Venkat123]

Jeet

I was commenting on the fact that Indian market peak was visible and therefore finding this particular market top was predictable to a certain extent.

[life2007]

Yes, Venkat.. Thanks

Originally Posted by Venkat123

Jeet

I was commenting on the fact that Indian market peak was visible and therefore finding this particular market top was predictable to a certain extent.

[VasanSuccess]

really not sure, Indian market is not in hands of Indians. It all depends on foreign investor. seems, Market is testing its lower bound. Though, Its good, to buy only after green comes

Regarding , can i sell now to avoid further loss, Nice idea, But when ever market fall(whole last wee) I had the feeling, the market is going to come up soon from tomorrow. Tomorrow come, But market shows red red red. If you can really predict then u are right

Imagine, You sell ur MF at 16(now u stand in loss of 2 Rs per unit) suddenly market shows upward trend and bounce back at 20, so u reenter(again 4 rs loss) our bad luck, it goes again to 16.

so insted stay invested, If you have no other investment opportunity. let the market settle(may be at 10 per unit) then slowly in 4-5 months time, ur nav will be back at 16-18. take decission at this point, If possible wait and start accumulate at 12 level, is better idea

[life2007]

Hello !!

No personal offence

Please go through this forum. Your replies are very much answered many times by the seniors over here. Why dont we think of using them preciously rather than wasting their time by asking one and the same question.

Higher or Lower NAVs does not matter in anyway .. if you are satisfied with this short answer.

Again.. I have learned (and still learning) so much from this forum in the span of just 2-3 months. I would like you to please go through different articles for your own benefit... I did not mean to hurt or upset you by any means.

Thanks

Jeet

Originally Posted by reufra

Hello everybody,

I had invested in SBI Magnum tax gain MF.When i invested the NAV value was around 54 Rs.Last month it was around 67 Rs.Due to the current market crash the NAV value has come down to around 59 now.I had opted for "DIVIDENT" option.

Iam now thinking to invest some more amount in the same fund.I am in the assumption that i would get more units if i purchase now as the NAV value has come down by 9 Rs.Does that make sense?.Can some body suggest on my decision?

[life2007]

Hello !!

Thanks for your views.

What I liked it most is your way of keeping it Simple. That indeed makes me believe you can be a good writer

Thanks again

Jeet

Originally Posted by VasanSuccess

really not sure, Indian market is not in hands of Indians. It all depends on foreign investor. seems, Market is testing its lower bound. Though, Its good, to buy only after green comes

Regarding , can i sell now to avoid further loss, Nice idea, But when ever market fall(whole last wee) I had the feeling, the market is going to come up soon from tomorrow. Tomorrow come, But market shows red red red. If you can really predict then u are right

Imagine, You sell ur MF at 16(now u stand in loss of 2 Rs per unit) suddenly market shows upward trend and bounce back at 20, so u reenter(again 4 rs loss) our bad luck, it goes again to 16.

so insted stay invested, If you have no other investment opportunity. let the market settle(may be at 10 per unit) then slowly in 4-5 months time, ur nav will be back at 16-18. take decission at this point, If possible wait and start accumulate at 12 level, is better idea

[reufra]

I don't think your answer "Higher or Lower NAVs does not matter in anyway" is right for this case!.

I had mentioned in my question that i had opted for DIVIDED option and i am clear enough that the dividied amount is purely based on the number of units.Since the market crash the unit values have come down.I was about to ask whether i can purchase the units now or wait for some more time for the NAV value to come down furthur?.