Over the past two weeks, I have been inundated by calls, sms’s and mails asking for “which stocks to invest in”.
While I am happy that most of my readers are seeing the current market volatility as an opportunity - I am also advising everyone to be patient. I believe that the markets will be volatile for some more time and there will be better opportunities in the coming two months.
Here is a chart that is self-explanatory.
As you can see, the Shanghai composite had a great rise and so it logically should come back to it’s mean in the coming few weeks /months. I believe that despite all efforts by the Chinese government the index will fall below the average level and then slowly come back.
This will surely impact the markets globally –including India. Our markets will go further down and will stabilise when the Chinese markets stabilise. So if you invest now – it would not be the best of timing. Sometimes it just pays to be patient.
Will you be able to truly bottom fish? No.
But is this the best time to buy good companies? NO.
My gut feel says that the buying opportunity will come when Shanghai composite goes below 2300 and the comes back to around 2500 levels.