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Year starts with a gaining ASI of 6635. Late last year 30th Sep 2010 being the last peak 6997 (selling point of your short and medium term investments to empty your portfolio bags and fill your money bags), it had been dropping to 6373 till 15th Dec 2010 (accumulating point of your favourite short med and long term value gems), and again starts its uptrend after 16th December and continues till 28th Feb 2011 ASI 6797 (point of selling)
Again it drops to 7029 till 15th March (buying point). Uptrend again till Sinhala Hindu new year day 7574 (selling point) and again drops to 7213 till 5th April (buying point) Again rises till 19th May (selling point).
I have noticed some people are worrying too much about the down trend of the market and even thinking of quitting. But this is a cyclical phenomenon the market go through every year. Very simply if you climb up a mountain then you have to climb down as you can't stay on the top forever. Time to time market would become bearish and bullish and a wise investor will identify the correct exit and entry points through his analysis, research and experience. Time to time the market will have correction periods to bring the market back to the correct value after rallies. In the history the best time an investor should have entered was ideally after the war May 2009 since the ASI has appreciated continuously without any significant correction time to 7000 levels in Sep 2010, from 1700 levels in May 2009. More then 400% increase in just 1 year and 4 months! And we can notice even 2000% increase in certain value gems in this period.
For those who follow this pattern, I guess accumulating point has come again. This doesn't necessarily mean that all the counters follow the same pattern, but this is the overall direction of the market. Short term traders won't be able to follow this patterns and gain capital gains. Therefore it is advisable to have about 90% of your portfolio for med and long term investments and about 10% for short term rallies. Cause since we all are in CSE we'll have to align our strategies accordingly. As per my personal view there will be a lot of speculative manipulations in the market in this quarter which are high risk. HNWIs will eat in to poor retailers money with these tsunamis. So better stick to the fundamentals. Also I'm under the feeling that the coming two quarters will have certain fundamental oriented rallies in some sectors and some stocks. We'll have to pay attention on the emerging sectors both globally and locally, identify the best counters in those sectors and will have to enter and exit at the right time.
Good luck
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Again it drops to 7029 till 15th March (buying point). Uptrend again till Sinhala Hindu new year day 7574 (selling point) and again drops to 7213 till 5th April (buying point) Again rises till 19th May (selling point).
I have noticed some people are worrying too much about the down trend of the market and even thinking of quitting. But this is a cyclical phenomenon the market go through every year. Very simply if you climb up a mountain then you have to climb down as you can't stay on the top forever. Time to time market would become bearish and bullish and a wise investor will identify the correct exit and entry points through his analysis, research and experience. Time to time the market will have correction periods to bring the market back to the correct value after rallies. In the history the best time an investor should have entered was ideally after the war May 2009 since the ASI has appreciated continuously without any significant correction time to 7000 levels in Sep 2010, from 1700 levels in May 2009. More then 400% increase in just 1 year and 4 months! And we can notice even 2000% increase in certain value gems in this period.
For those who follow this pattern, I guess accumulating point has come again. This doesn't necessarily mean that all the counters follow the same pattern, but this is the overall direction of the market. Short term traders won't be able to follow this patterns and gain capital gains. Therefore it is advisable to have about 90% of your portfolio for med and long term investments and about 10% for short term rallies. Cause since we all are in CSE we'll have to align our strategies accordingly. As per my personal view there will be a lot of speculative manipulations in the market in this quarter which are high risk. HNWIs will eat in to poor retailers money with these tsunamis. So better stick to the fundamentals. Also I'm under the feeling that the coming two quarters will have certain fundamental oriented rallies in some sectors and some stocks. We'll have to pay attention on the emerging sectors both globally and locally, identify the best counters in those sectors and will have to enter and exit at the right time.
Good luck
