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MARCH With Midas Touch

There has always been a marked concern on as to whether there is some fix pattern for some months or season which are predictable as far as the returns on the stocks are concerned and if this is so than as an investor will be obviously compelled to invest in that ideal time frame to invest in the markets. Like all the past years in question as far as the similarities are concerned is just one that all the years are different with no similarities what so ever and just like the pattern of the years even the equity markets are no different and hence there is no pattern, clarity and season-ability which are the indicators of determining your entry and exit levels.

 Come what may the March is a Very Good month to get into the investments and ensure that you get some decent dividend to take back home and August is usually considered to be a lackluster month for most of the investors as there are less number of the participants in the markets due to the exhaustion and there is a common sentiment of inaction or lethargy due to the financial yearend in general. Then if we take a look at December likewise, the last week of December is called as the Santa Claus rally which triggers the rally by a rise in the stock price in the month of December which generally emerges in the final week of the trading prior to the New Year and this is also called the December effect. Actually the term Santa Claus rally has its root in the US where this effect has been making its presence felt and has xeroxed its effect even in the domestic markets during the December month however this effect in India is more due to the aura of the New Year perspective than any other factor but none the less the rally is in evident, even though the FIIs take a back seat and so also the investors take a break due to the long line of the festive season and so also the long new year celebration vacation mood.

The Happy New Year Effect or the January effect is seen as a trend which emerges as a high tide wave between the December 31 and the first week of the January and is coined as the January effect as it is very significant in predicting the trend of the stock markets for the rest of the calendar year because there is considerable selling of the stock holdings to claim the capital losses that would benefit the investors from the tax point of view and as the calendar year rolls over the investors plough this amount back into the markets which only helps in pushing the prices up there by creating a effect of a roller coaster ride of sorts. The same stocks which have been sold off to cover-up the losses will than trade at a discount, and the intraday poachers creep in to such laggards to ride this sort of the short term wave.

 As an investor one must be wise sector wise and investing in the equities through advices from research and fundamental evaluation done by research based advisory firms and makes it a habit of investing regularly and systematically. There are several market participants like FIIs for long as well as the short term investments, mutual funds for the long term investments, corporate for the wealth creation as well as protecting the stakes. Investors for savings, traders for the usual business activity, then there are speculators with the gambling instincts and the operators create the interest in the scrip.

There are various sensex sectors like the information technology, finance, oil and gas, FMCG, Transport, Healthcare, Capital goods, Metal & mining, power and the telecom. Now there are various reasons affecting the equity markets like the ratio of the imports and exports, news about the various companies, their quarterly reports reflecting upon the company’s earnings, number of layoff days in the company, the exchange rates, economy, the interest rates, oil prices, inflation rate, global news, national and the regional news, the terrorist attacks, the stock momentum, the hype created, supply and the demand ratio, current market position and the targets projected by the analysts, stocks of an industry the fear and greed factor effect the sentiments of the market.

 Actually the fundamental analysis is the first benchmark which involves the financial statement of both the quantitative as well as the qualitative analysis of the revenue, expenses, assets and liabilities, focus on the over current as well as the undercurrent of the underlying factors of the company’s actual business and so also its future prospects, and analysis of the economy, sector, industry as well as the company. Why March – Indian economy is on the go and India is the fastest growing economy of the world, we have strong consumption, the growth of the economy is sustained, and most of the companies are having a very strong shareholders return over the period of time. India has a great earning visibility in most of the listed Indian companies.

 Equity has a very strong demographic profile with the emphasis on the large pool of the qualified manpower, good track record in the service delivery sectors like the IT, medical sector and the education sector too. With proper efforts to flourish the tourism and the budget by the end of February and the ongoing auction of coal and the spectrum is bound to have a very positive effect market rally.