Techno Finance and Executive Diary...

Thursday, November 02, 2006

Best way to Invest in India-Indian stocks

Best way to invest in India- Indian Stocks

Indian Economy is booming greatly. Most recently it is heard that it will grow at the rate of 10%. Resultants may be the growth in the operations and great performance showed by the Indian companies’ quarter over quarter. Stocks may be treated as one of the best investments in India from anywhere in the world. I would like to present my views on the investment strategy and the stocks

View One-Sectoral View-Isn't the software sector too good to miss?

Too many times, we hear that an industry, say biotechnology or software, has a bright future. That makes some investors think that they have to have a biotechnology or software stock in their portfolio. They end up buying one, regardless of what its financials are like. The future is not guaranteed for any company just because it operates in a particular industry that has a strong growth potential. It still comes down to the quality of management and how effectively the management team can direct the future of the company

View 2-The magic number: 20 and no more.

Once it has been decided to Invest in a stock, which brings us to the percentage of the portfolio that should be in any one stock or industry. There may not be an exact answer, but in a large portfolio, a prudent approach might be to have no more than 20% of the portfolio's total value in one single stock. As a portfolio is being built, that percentage might go as high as 25%. At the same time, I don't think there should be a formula to sell stocks just because they have performed well and exceed the said guidelines.

I found the Indian stock market very interesting. A way to invest in India is to purchase Indian companies listed on US stock exchanges. Below is a list of Indian stocks listed on the US market.

DR REDDY (RDY)
HDFC BANK (HDB)
ICICI BANK (IBN)
INFOSYS TECH. (INFY)
MTNL (MTE)
REDIFF.COM (REDF)
SATYAM COMP (SAY)
SATYAM INFOWAY (SIFY)
SILVERLINE TECH. (SLTTY)
TATA MOTORS (TTM)
VSNL (VSL)
WIPRO (WIT)

View3-"Don't put all your eggs in one basket."

Good advice like no other. When it comes to investing, diversification - putting your money into a variety of stocks that have different return potentials and risk levels - means not putting all your eggs into one investment basket. Since market cycles vary, diversification will allow you to offset possible losses in one investment with potential gains in another and, as a result, help reduce your overall exposure to risk.

So, from now on, every morning when you wake up and look in the mirror, ask yourself this: Have I diversified my portfolio today?

Labels: Stock Market

Posted by "CPerformance" :: 12:07 AM :: 2 comments