investment techniques

Investment Strategies and Portfolio Growth So Far….

Copyright © 2012 21G Investments. All rights reserved.

How to get Results from Investment ??

The most important key to get results from any investment are :

• Patience• Trust in the investment source • Risk Taking Capacity• Smart Enough to Accept your mistakes and perseverant

enough to listen/apply new techniques and ideas.


Types of Investment Plans in Stock Market :

• Systematic Investment Plan (SIP)

• Long Term Equity Investment

• Short Term Equity Investment

• Investment in Stocks/Bonds.

Copyright © 2012 21G Investments. All rights reserved. Page 3

Systematic Investment Plan Of Investing

•Less risk involving style of investing in which a person relies on the investment firm to invest fixed amount of money every month in mutual funds/bonds .•It is similar to recurring deposit.

Advantages : • Flexibility of Investment : Person can invest according to his/her pocket.

•No knowledge of stock investment is required as it is the responsibility of the investment company to invest the money .

• The risk factor involved is less as the profit/loss is evenly spread out across a number of shares.

Disadvantages:

• No transparency as the investor never gets to know the stocks in which his/her money is invested.

•Every company has a different growth pattern which means that one’s knowledge pool has to be huge in order to be successful.

• Since risk involved is less ; reward is also less .


Long Term Equity Investment

•Involves both technical and fundamental styles of equity investment in which the investor invests the money in the stock market for longer period of time .

Advantage : • Safest form of equity investment as the money is invested for a longer time keeping in view the bigger gains rather that small losses and the company’s growth patterns and policies on which the company is going to grow in times to come.

•Everyday fluctuations in the market do not come in to picture as the money is invested for longer periods of time. So we do not need to spend a lot of time on it everyday.

Disadvantage :

•Involves a lot of patience as everyday fluctuations are not easy to deal with all the time.•The investor blocks the money for a substantial amount of time.


Short Term Equity Investment

A technical and recent style of equity investment in which the investor invests the money in the stock market for shorter period of time ( 1 day to maximum 2 weeks) .

Advantage : • Investor does not need to have big amount of money in hand for intra day or short duration trades in the stock market as the investor can buy more stocks even with token money.

•Profits are booked within 2 weeks time and people do not have to wait for longer periods of time.

Disadvantage :

•More than investment strategy it becomes a full time job as the investor has to look for everyday fluctuations in the stock market and book profit/loss .

•Most of the times investor’s dependency on the company’s performance and logistics is outclassed by market’s movements which leads to non practical decisions as the profit /loss has to be booked to close the trade.


A look at the Portfolio Growth So Far…

My Investment History

•I started investing in Indian stock markets in 2007 and since then I have been following the market trends. •Market was 13K in 2007 and went through a series of bull and bear trends.•I believe Indian stock market will see it’s bull trend that’s going to stay for the next 4-5 years and some smart and strategic moves can help in fetching 300 – 400 % returns possibly over the next 4-5 years.

PS: Now next few slides focus on my personal portfolio and it’s performance 2007 onwards.


Market Movements w.r.t. time

‘05-’06 06-07

07-08

08-09 09-10

10-11

11-12

12-


Portfolio Performance w.r.t. time and market

2007 -2008

• Money Invested : 30 lacs

• Market behaviour : Started at 13 K reached 21000 and then crashed and came back to 16.5 K

• Profit/Loss Incurred :NIL • .Highlights

Year saw market crossing 20K levels and lot of people actually lost the game in this bull run as market suffered a 5K loss after that and people starting the game at 18-19K levels either have the money blocked waiting for the market to revive or incur losses.

On the contrary people starting at 13K and quitting at 21K would have minted enough money. Various theories and analogies showed that market was about to suffer a big crash. So took 80% money out of the equities and invested in bonds which left stocks worth 6 lacs.



2008 -2009

• Money Invested : Rs. 600,000 in stocks and Rs. 2,400,000 in liquid funds

•Market behaviour : Started around 16 K levels and slumped to 9800 levels.

•Profit/Loss Incurred : Rs.100,000 profit •.Highlights

Market crashed to 9800 levels (35% lower than the previous year) there by completing the correction curve for the stock market.

There was a loss of about Rs. 100.000 in the equity investments but the money invested in liquid funds yielded profits of about Rs. 200,000 which covered the equity loss and ended the year on a positive note in times where country experienced the biggest stock market crash of the decade.



2009 -2010


•Market behaviour : Started around 10 K levels and reached around 17500.

•Profit/Loss Incurred : Rs. 600,000 Profit •.Highlights : This year provided excellent opportunity for investors to mint money as the market showed a dramatic increase in the sensex levels .

I invested all the money in the market around 11K levels but was impatient enough to quit the market around 14.5 K levels and book profit of around 6 lacs .

A further study of the stock markets and analysis of the stock patterns for various shares I sold revealed the fact that I booked profits early and India would enter it’s bull phase pretty soon although the levels from which the market would correct itself (21 K levels) was far below the level where I booked the profit (14 K levels).



2010 -2011


•Market behaviour : Started around 17.5 K levels and reached around 19.5 K.

•Profit/Loss Incurred : Rs 600,000 •.Highlights :

There was a slight change in the strategy this time as I invested around 3 lacs / month in the stocks that were predicted to give 300 – 400 % returns around 4-5 years time.

Earned around 2-3 lacs by investing from 4 different accounts in Initial Public Offerings (IPOs) and around 1-2 lacs in liquid funds and lending money on interest.

I realized that this time was the best time to invest in stocks and not book profits as the market was about to enter it’s dream run.



2011 -2012


•Market behaviour : Started at 19,500 and ended around 17,400 level.

•Profit/Loss Incurred : Rs. 100,000 profit •.Highlights

If we study the Elliot wave theory and it’s principles in details it can be predicted that the market was going to enter it’s bull phase as the market is about to enter the 3 rd upward move. I believed that it was the best time to invest in the market as the 3 rd upward move makes the bull pattern quite evident and clear. This prompted me to increase my investment portfolio from 30 lacs to 1 crore.

Results so far : We saw the market slump tp 15000 levels and that was the time when I put 30 lacs in one shot in the stock market and strengthen my porfolio slowly and gradually there after.

Right now I see about 6-7 % growth in the portfolio with the market reaching 18,500 levels in 7 months after going down to 15,900 .


Conclusions…

• SIP can be a good investment strategy especially in times when markets are unpredictable and are not giving any signal of upward/downward movement.

• At this time when the market is entering it’s bull phase I believe that we can increase the profit percentage by a big margin if we increase our investments in equities as although SIPs are safe source of investment but the profits in SIPs are very limited.

• We can make around 200-300% returns by investing in Long Term Investment Stocks when the market is entering it’s bull phase.


For further assistance:Gaurav Verma21G Investmentshttp://www.facebook.com/pages/21G-Investments/353301421363897

Do You Have Any Questions?


Disclaimer:

The slides are for educational purpose only and these are my personal views which can be right or wrong.

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