With markets falling on a daily basis, for an average on the street investor equities is indeed becoming a bad word. Many will swear never to come back to the markets. . . today the govt bonds and Fixed deposits look more attractive than ever before, and so is the case with gold. . .anything that offers 'secure' returns now looks the only option . . .Its quite understandable considering that the investments have actually come to 1/10th of what they were at the peak of the bull market, and now with people predicting that we would not be seeing those highs for another 5-6 years, its not a comforting news. . . What is complicating the situation is that earnings have started to fall and hence the paradigm changes, so now you dont even know that the company that is quoting at a PE of 2 is cheap or not, since for all you know that next quarter it might end up in losses. . .
I am also little terrified now as to where is this downturn heading, as I had hoped that the recovery or the uptrend that we were seeing for the last one month, would take us higher. . . now with the new downturn beginning, all one that can hope is that we do not break the previous lows. . .
It is very very critical that NIFTY does not break below 2550
as we have already tested that bottom, and we have rebounded from there twice. If we break that level then the problem is that first we would have to make a new bottom. Then after a month of that go up to some level then come back and retest that bottom, before we start our new upmove and then all we can do is pray that the new bottom does not get broken again. . . whew!!!
How things can change within one year, its a spectacle to see. . .
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