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Is it beneficial for the fresh investor or new investor to invest in stock market at present market condition?

                          new investor to invest in stock market at present market condition?



These days, One question is coming into the mind of the every investors of the stock market that what to do in the stock market or share market when the market is making new highs from last few months.

It is really very difficult for new investors those have invested into the stock market or share market recently because market is already at peak levels. Even many new investors are waiting on side line & they want to start their investment in to the stock market but they are scaring for making investment on higher level of Sensex & Nifty. Let us discuss this topic and try to find the best solution of it. Let us take this discussion into various steps 

Understand the market trend

There is no any question that market is trading at higher valuations. Sensex is trading around  52,711 & nifty spot  is trading around 15804 levels, also bank Nifty spot is trading around 34,550 levels. Since march 2020, Indian stock market has given huge run up from lower levels of 7650 to 7700 levels in nifty spot to 15800+ levels in nifty spot till date of 30/ July/ 2021. Even e had seen some profit bookings into the market before reaching at such higher levels which was a good sign.

Market is in Bull run

One thing we all have to accept that Indian stock market is in the strong grip of the bulls. Small profit booking into the Indian stock market makes it attractive as a buying opportunity. We have seen huge or multiple returns into mid cap and small cap stocks in the recent past & Still there is lot of stock specific buying opportunities are available into the mid cap and small cap segment. Mid cap & small cap stocks are always on the radar of the retail Investors as well as in the eyes of big HNI's. It clearly indicating that still more funds inflow is pending to come into the Indian stock market.

Funds Inflow into the market

In the recent few months, We have seen nearly 2.7 trillion or $37 billion Foreign portfolio investors or FPI investment into the Indian stock market. It is good enough to pull the stock market on the higher levels but It was not only factor that Indian share market made new high from lower levels of march 2020. Indian Government has also play good role to give relief to Indian Industry by announcing the stimulus package of INR 20 Trillion & finance Minster announced 1.7 trillion or USD 22 Billion package. Overall, If we will do analysis of Indian stock market then we will  find out that there were few reasons that Indian stock market has given huge run up even during Covid 19 pandemic time.

Support from World Markets

The world markets had also played important role for giving support to the Indian stock market bull run. World largest economic & US president Joe bidden has also announced stimulus package of $ 1.9 trillion to help US economy. This announcement had given good support to the world markets.

World Markets performed well During Pandemic 

When Covid 19 had given knock into the world then World stock markets reacted very negatively & we had seen panic selling in all work stock market. Even due to the lock down into many countries the world economy faced tough time but the lock down for that time was also important for saving the human lives. All countries managed this situation very well or in right way & announcement of the stimulus packages was also good step for supporting the world economy.

Advice for New Investors & for existing investors of stock market or share market

If you all will read the above factors which I discussed with you then the simple reply is that if Indian stock market had given the huge run up from the lower levels of the march 2020 lows then there was some logic's behind it. That was the reasons, the world markets as well as Indian stock market is still sustaining the higher levels. The fund inflow into the India stock market will still continue in the coming months. Profit booking is the part of the stock market. In may last few posts, I had mentioned that every decline is the buying opportunity in the Indian stock market and it proved me right. We have seen multiple returns into the stock market and in many stocks. 

New Investors should not be worried for making investment into the Indian stock market but first try to set up your mind that what is your time horizon for making investment. We always see volatility into the stock market when it makes new high but new investor always wants to play safe then mutual funds may also be good option for them but stock market should be the first choice if you want to bear a risk and want to earn more profit. 

Foreign investment shot up more than 25 % in the recent past few months. This investment is also expected in the coming months. Even The Domestic Institution investors or DII's play vital role into the Indian stock market. Indian growth is story is still intact in FY 22. FIIS & DIIS have also increased their stake in cement, metal & in consumer durable sector which shows they have confidence on Indian economy recovery from the Covid 19 Pandemic loss.

Corona Vaccination is playing important role for deciding the trend of the Indian stock market because the vaccination rate will give freedom to the world for moving anywhere around the world. The vaccination rate in India is very good and it is nearly above 45 crore people has taken their first Jab of corona vaccine and above 9.82 crore people have fully vaccinated in India. It is a very good sign for Indian economy.

In nutshell, We can say that Indian economy is not a wrong track & it is performing well even during Covid pandemic time. New investors should invest into the stock market with the horizon of 2 to 3 years & he/she should have ability to see the ups & downs of the Indian stock market which is expected in the coming days. If any new investor come into the share market then he/she should book profit on the higher levels and should try to make new entry at the lower levels or If any new investors do not want to take risk at this levels of the Sensex & nifty then he/she should use the dip as a buying opportunity. Also, be stock specific or you may take guidance of stock market expert before making new investment.

Also read it: How to earn money in volatile stock market

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