Investing in shares is a risky affair. If you invest in wrong stocks, your investment may result in negative returns. But it is very difficult to predict which shares will return a positive return over the next few years.
When I started investing in stocks few years back, I lost Rs. 2,00,000 in my first week of trading. The shares went down hill and never recovered. I did not have much experience in trading and I made mistakes. I also did not spend much time to study the market. The same is the case with many salaries people like me.
In the last two years, I used some algorithmic trend analysis to make a realistic prediction for which shares might perform good in short term. Also common sense and awareness helped a lot in taking decisions. Overall I lost Rs. 3,00,000 an gained Rs 14,70,000 in the past two years. So I thought why not share some information with other people who cannot afford to spend more time in market analysis.
Remember two facts regarding share market:
- Growth/fall in share price does not depend on the companies performance. It mostly depends on the public sentiments on the company.
- Share market is designed to be unpredictable. You cannot always predict the rise/fall in share price. If you can predict half the cases accurately, you will become freaking rich soon!
Consider a share that gave multi-fold return – Mawana Sugars (MAWANASUG): The share price has grown 8 times between April 2015 to April 2017. If you invested Rs. 300,000 your gains on selling in April 2017 will be more than Rs.20,00,000. Now I do not recommend buying this. Assume you invested in three shares with Rs. 3,00,000 each. If other two caused me a combined loss of Rs. 3,00,000, my net gains is more than Rs. 17,00,000.
I would suggest two approaches for choosing your lucky stocks.
- Buy the stocks that are likely to gain by government policies/market shift.
- Buy the shares that are at ALL-TIME-LOW. They may only rise.
The second option is pretty easy. The first approach requires huge technical work. Every month I fetch the share prices from google finance and run an algorithm to identify the future trend. And these two approaches gave me significant returns that I could never get from Mutual Funds or fixed deposits.
Coming to the original question, which share I should buy NOW ??
GST is being rolled out, the factories are going to make profit. The manufacturing sector is a safe bet. Among the shares that have fallen to all time low, one is Anil Limited and other is Compuage Infocom. These two I can think of for this month. Will they make loss ?? May be! Can they give profit?? Most likely YES!! In case of profit, the loss will be comparatively much less.
Taking a breaking until next month!!
Disclaimer: I do not belong to any financial organization. I am just a programmer who takes interest in high performance computing and trading. Decide your investments at your own risk.