Stock Market Forecasts

Rely on your well-studied conclusions and stick to them

A youth in deep love fell sick. How was he cured? The poet writes,

"Half the cure goes to the credit of knowledgeable doctor's medical research,
Half to her magical touch!

Similar is the case with the stock market forecasts. Your research, analytical abilities, deep knowledge about the history of the goings on in the exchange, your regular reading of the articles in periodicals, all these will add to your understanding of the issues, but will never provide accurate and reliable conclusions. When the ocean is calm, the swimmer is not afraid to take the plunge. But when it is turbulent, only the experts will have the courage to have a go at it. When the going is smooth, investors buy and sell with confidence. Panic prevails when the exchange is volatile. At this time, any forecast and the investments on the basis of such predictions are fraught with grave risks. Give credence to the realities, the permanent factors, not the variable ones, when to you decide upon investments. Some of the possible strategies to deal with the situation are:

You see speculators swarming the exchange, but the exchange does not belong to them. It is the realm of the practical people, those who believe in long term investing. When market crashes, the speculators bite the dust.

Have no tension about the price movements. You have decided to buy a share, you have decided about its limitations, you have pre-fixed the margin at which you have to sell it-that's all. Fear about the temporary fluctuations is futile. The day to day calculations that 'I have gained this much or I have lost this much,' are meaningless. You need to take care as and when a particular share is continuously on the slide. You need to go into the root cause, and if necessary take an ad-hoc decision about selling the share, from among the many on which your future hopes lay. With this decision, you minimize your losses.

Predictions based on research are differed from wild guesses made on whims and fancies. The creditability of the researched material is not to be relied upon completely, as more than one factor influence the share price. Wild guesses have no basis and the sale and purchase that you do on haunches is nothing but gambling. You may gain or lose. This approach is not meant for the ones who wish to make a permanent profitable career out of the dealings in the exchange. Stock market corrections are not to be confused with the predictions on the share prices. But keep a watch on the share, whether the price fall is due to corrections or due to degeneration. You need to study the current profile of the company and arrive at your own conclusions, in consultations with the experts on the subject.

When you stop trusting those experts who claim to make accurate predictions in shares, know that it is the beginning of knowledge for you. You can read such literature for the sake of enjoyment of their ignorance. If the predictions were to be accurate as per the claim, the person concerned would not have waited for the payment for the article published; he would have straightaway invested heavily in such shares to reap the benefit. Remember your broker is in the share business, and whether loss or gain, he gets his brokerage for each trade. Mailing literature to you regularly is part of his professional job, and business-promotion strategy. He is promoting the company while claiming to promote your interests.

Remember, the forecast could be a trap. Winning is a matter of your application and study. Your conclusions are your precious assets. Work on them and stick to them.