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Price to Earnings Ratio & FOMO - Part II

 

Coming back to our previous topic. How to construct your portfolio? Currently as the share market is at a higher valuation you can invest around 15% to 20% of your portfolio amount in the share market, other 20% in Gold and Silver. This will help you in getting out of FOMO. So if the market goes bullish from here then you will earn a good profit later and if the market falls then you can further increase your investment here as you had not invested the entire amount previously. Then if the market goes in the uptrend, you will earn a good profit there.

 

Now, where should you invest in the Equity market? We have mentioned in many of our previous videos that if you are investing directly then you should invest in only those companies that have a sustainable competitive advantage. If you are investing indirectly via Mutual Funds then we have already covered this topic in our previous blogs. Do check it out. If you wish to make an indirect investment then you can invest in Nifty, Nifty Bees, Junior Bees, etc. But you should make this investment depending upon the market valuation. When the market valuation is high, invest less and when the market valuation is low, you can increase your investment in the equity market. This was all about investment.

 

Now talking about trading, the level of 10,562 acts as an important level for Nifty. Till the Nifty is above this level, the market is in uptrend. So technically the market is in uptrend but fundamentally the market is expensive. Due to this, if Nifty continues to remain in uptrend in the near future then you can trade in those shares that are in uptrend and have just come out of the box. Now if you want to know more about this box technique then we have already uploaded two blogs previously on this topic. Do check them out. So you can trade in those shares which have come out of the box by keeping a stoploss and trade with minimum capital as market valuation is currently expensive.

 

While trading technically, which share should you invest in? Currently the IT Index is going in an uptrend. Last time we had talked about L&T InfoTech limited. Now, HCL Tech has given an uptrend signal by coming out of the box. Till the time HCL tech is above Rd. 544, it will remain in uptrend. So here you can trade with limited capital till HCL and market seem to be in uptrend. Also, as you can go wrong anytime, hence invest minimum amount there. Otherwise you would blame us.

 

Last week the American share market Dow Jones had witnessed a fall and due to this the next week initially may start on a negative note. But till the time Nifty is above the mark of 10,562 market is in uptrend. So technically even though the market is in uptrend but fundamentally the market valuation is expensive. Hence, even if you are trading or investing in the market, keep your investment minimum while buying in the market. Also while trading make sure to follow the stoploss. In this blog we have covered hoe to chalk out the investment or positional trading strategy by keeping in mind the market valuation and trend analysis.

 

If you personally wish to learn the box technique then for that you can download our Aryaamoney app and subscribe to our Smart Investor program to learn the Box Technique. With this subscription you also get a complete hand holding support for 60 days along with a technical tool as well.

 

If you wish to learn the strategy for long-term investment spanning around 5 years or more and wish to become a professional investor then give us a call on 09922092369 to know more about it. If you wish to open your Demat account with one of India’s leading brokers the we have mentioned the link for the same in the description below. Do have a look.

 

The American - British Economist and Investor Mr. Benjamin Graham quotes, “In the short-run, the stock market is a voting machine while in the long-run it is a weighing machine.” So if you wish to become a successful investor then investing based upon market valuation is very important.

 

Until our next blog…

 

Happy Trading, Happy Investing!!!

 

 

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http://upstox.com/open-account/?f=9V8L

 

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https://www.youtube.com/watch?v=8psiglsBuA4

 

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