Diwali Dhamaka- stocks .....

LAST YEAR WAS A CLEAR WINNER FOR ME, AS MY BOTTOM FISHINNING APPROACH GAVE VERY DECENT MONEY.  BLOWING ONCE OWN TRUMPET is very common in stock market and I am doing the same to recapitulate the sweet memories….. 

People close to me who received my recommendations orally got benefited immensely as the rises in the stocks are very astonishing. The Diwali Dhamaka- stocks  are still available even in current grim scenario, despite global turmoil, rising inflation and lack of policy decisions favouring the markets... search, invest and reap the "Money from Markets"...

Normally I don’t offer stock specific recommendation in my blog but do consider reviewing the economic situation and overall Nifty direction. In my earlier publish, I suggested not to go short as the Nifty will take its’ up turn to 5280. Now yesterday it touched 5257 with 55 points premium.

I suggested my friends to buy Arvind at 52 and with a target of 93. It surpassed the level after touching 93 fell and bounced with vengeance to float at 110. It was my best pick and suggested to buy at 42 and the low is at 38. The stock rallied from 40 to 110 with in this year.

I also suggested to buy spic at 17-18 range and recommended after it crossed 21, went to 33 now languishing at 27 level. This stock has very good potential.

The best large cap stocks are all in the selling side. The best selling was Rel Infra at 1220-30 level came down to 400 level with out a threat.

The next best is the selling is Tata Motors identified at 1240 level to short but went to 1300 level and the journey started for the recommended target to touch 725. In the middle we did some “extra intelligent move and bought it and paid the penalty”.

The third best was SBIN when it was ruling at 3200 identified that it will touch 1900 level. The Bank Nifty fall was identified simultaneously. The other stock was TataSteel below 680 it will touch 420 level and the same was honoured.

The market was extremely bullish at 6280-6300 level and every body was talking about 6700-7000 level, suggested not to venture as there was a flaw in the stock movement. Then I was proved right carried till 4700 level. As a matter of fact it is only an intermediatary support. The rest of the time to time levels were published in my posts regularly.

The worst misfire was Moserbaer which was recommended at 68 level enjoyed some profits above 72-75 level but equally suggested to cut the exposure by 50% below 63 and exit below 58 level now came to 22-26 level without any respite. The other miss out was Suzlon, recommended to buy at 60 level but still bullish on the stock.

There are other short-term buys’ recommended are in M&M, recently when it was at 720 level recommended, even it came to 680 level also suggested to buy. The stock touched 820 and fell back to 770 levels. I once again recommended buying for a target of 860 level and the target achieved, yesterday 860, still got potential to touch 940 level. They are dozen penny stocks gave returns over 300-500 times in this season, especially last 6 months.

Anyway, the history is rosy and colorful to every market participant in dreams with"HAD IT BEEN SO"... It is very difficult to stick to the basic principle “sailing with the trend” to make decent money from the stock markets. The best way is simple but we make it complicated with our so called experience and extra intelligence, get trapped and book losses. Every participant can make money from the market, by studying the industry growth prospects and booking the profit when your call was reasonably honoured. The current market is in the consolidation period. People close to me know that I kept on saying and again saying for some more years it will be in consolidation phase. So select some out performing stocks and stick to the principle that 100% appreciation is very good in 6-9 months.

HAPPY DEWALI...

HAPPY DEEPAWALI TO READERS...

THE FESTIVAL OF LIGHTS SHALL BRING YOU PROSPERITY AND PEACE IN LIFE.

THE STOCKS WILL CHEER YOU NEVER BEFORE...

THE WAVE OF BULL RUN IS UNFOLDING.....

ENJOY PROSPERITY FROM STOCK MARKETS FROM MY RECOMMENDATIONS...

MARKET OPPORTUNITIES!!!!!!

24 OCT, 2011, 06.38AM IST, NIKHIL WALAVALKAR,ET BUREAU 

Diwali 2011: Don't trust PMS companies with your Diwali bonus

 

The festival of lights also means hard cash for some individuals. Sure, the Diwali bonus may not be that high this year because of the depressed economic scenario. Still, there is no denying that some people would see extra cash coming into their bank accounts. 

Of course, festival expenses may claim a part of it. But the wise folks would always look for ways to deploy the cash in avenues that would fetch them good returns. And portfolio management services (PMS), typically trying to corner the Diwali bonus, would tell you that the best way to deploy the money in the stock market is through them, especially at a time when stocks are available at attractive prices. 

Really? Does that mean you should bid adieu to your good old mutual fund distributor and opt for a new upmarket PMS manager? 

How they compare 

The similarity between an equity mutual fund and a portfolio management service is that both invest in stocks and related instruments on behalf of their clients or investors. 

But that is where the similarity ends. Take, for example, the minimum investment amount required for a mutual fund and a PMS scheme. You should have a minimum investment corpus of 5 lakh to get the service of a PMS. On the other hand, you can invest as little as a few thousand rupees in an equity mutual fund. Another big difference between a mutual fund and a portfolio management service is the nature of their holdings. You hold units in a mutual fund, whereas you hold securities in PMS. This may not look a big difference, but that is not the case. When a large investor redeems his mutual fund units, the fund manager is forced to sell the holdings, which may affect the net asset value (NAV) of the scheme adversely. 

"In a PMS, since all the accounts are independent, an investor's exit does not impact others adversely," says Jayant Pai, vice-president, Parag Parikh Financial Advisory Services. 

If you are a large investor, you can get a PMS offering customised to your needs. In fact, this is one important reason why many well-heeled prefer PMS over mutual funds. You can put conditions to the portfolio manager. For example, you can tell the manager that you don't want him to invest your money in tobacco and liquor manufacturing companies. 

"But do not expect customisation with 5 lakh investment. Each service provider will have its own threshold for offering customisation," says a portfolio manager registered with Sebi. 

The fee that is charged is another point of distinction. An equity mutual fund investor typically pays 2.5% of the money invested as fund management fee every year. However, most PMS providers give you the option to choose a fixed fee or a fixed and variable fee. You will pay around 2% of assets every quarter as fixed fee. The portfolio manager charges approximately 1% of assets per annum and further takes 10% to 25% of the profits taken above a hurdle rate of around 10% in the fixed and variable fee model. Moreover, brokerage and other transaction charges will also be charged to your account. In short, PMS is a costly affair. 

"Some portfolio managers also work as stock brokers and to earn higher brokerage income, churn the portfolio unnecessarily," says the portfolio manager quoted above. 

The investment styles and the way the portfolios are managed also differ in mutual funds and PMS. A portfolio manager has more freedom to create and protect wealth. A portfolio manager may, for example, sit on cash for a long period if he can't find suitable investment opportunities. But a fund manager may not do be able to do it for a prolonged period of time. 

Taxation 

Both PMS and equity mutual fund investors don't have to pay tax on long-term capital gains. If you hold on to mutual fund units for more than a year, you need not pay any tax on gains even though fund manager may have been executing short-term trades. But a portfolio manager keen on making short-term investments because of investment objective or to generate brokerage income may end up making higher short-term capital gains, resulting in high tax burden for investors. So, even if you are invested in PMS for years, you may end up paying higher tax than mutual fund investors. 

Also, tax authorities may treat a high-trading PMS account as a 'business and trading' activity and not 'investment' activity, making the source of income to be business and not investment, which would again push up the tax burden. 

Exit charges 

If you have landed in a wrong mutual fund scheme, you can leave it by paying a small exit load, mostly 1%. However, some institutional PMSs charge an exit fee of as high as 4% if you exit within a year. 

"Sometimes, PMS is marketed as third-party products and manufacturers have to introduce exit fees to retain clients as they incur high distribution costs," says Gajendra Kothari. 

The selection process 

Selecting a good performer in a mutual fund category is almost a child's play. You have a number of publications and various websites that offer information on mutual funds. Some independent websites even rank funds based on performance. 

However, things are not so easy when it comes to portfolio management services. There are no information aggregators to offer you all material information in one place. You may have to approach each of the service providers before you can decide on a scheme that would suit you.