Should You Buy 52 Week Low Stocks

The 52-week high and low refers to the highest and lowest market prices of a given security over a 52-week (one year) period.

There are various categories of investors in India and most of them take their investment and trading decisions as to which stock to buy based on their personal instincts without having much knowledge about the stock markets and its basics. And the most popular one is of course is buying 52 week low stocks for short term investing for a period of one to two years or for trading

For Traders

If you ask me seriously, traders must avoid buying 52 week low stocks as the general trend of the stock is downward and all the technical indicators may give a sell signal rather than a buy signal. Secondly, trend is your friend when we study technical analysis. Example: We can see stocks like Kingfisher Airlines, Unitech and Lanco Infratech making new lows every now and then

For Investors

Although, you might feel that the stock is good bet based on stock valuation parameters, but if the market is trending sideways or trending upwards, but still the stock is making new lows, the stock may be making new lows because the fundamentals of the stock might have deteriorated and the stock may trade at low PE multiple in the future because of bleak future prospects of the company. The best examples is Crompton Greaves whose price became half in the week time and never recovered.

How SIP in mutual funds can make you a double Crorepati

Systematic Investment Plan as the name suggest is one of the most systematic way to invest indirectly in equity markets at regular intervals that may be daily, monthly or quarterly.
For Example: If Arun has started off a SIP of Rs 5000, it means every month Rs 5000 gets deducted from his bank account and gets invested in a mutual fund scheme selected by him on a given particular day of the month


What are advantages of investing through SIP in Mutual Funds which takes you to become a Crorepati


There are two advantages of investing in mutual funds through SIP. Rupee Cost Averaging and Power of Compounding


Power Of Compounding
Let me explain this with the help of example. Suppose Abhishek started a SIP in Mutual funds in one of the best equity diversified funds of Rs 5000 in 2001. This means his total investment till December 2010 (a total of 120 installments) works out at Rs 6,00,000. As most of the mutual funds have given more than 16% returns from 2001, his wealth would have grown to around 18,00,000 in 2010 and if Abhishek doesnt invest more and stop his SIP at this time, after 10 years, he can expect his money to be around 90,00,000 (90 Lakhs),. nearly becoming a Crorepati assuming 18% returns in the next 10 years which is possible by right selection of mutual funds and monitoring it year after year. This is done with a investment of just Rs 5000 per month for 10 years i.e Rs 600000 of total investment.


Rupee Cost Averaging
Rupee Cost Averaging is the process of buying mutual funds where you are a buyer at each level of market i.e at higher levels of market and at lower levels also. The mutual fund units purchased at lower levels gives you a chance to average out your investment at lower price and thus get significant returns. Mind you, even a 2% annualised returns can make a big difference to your mutual fund portfolio


Never under estimate the power of compounding. Invest systematically and become a double Crorepati by investing in mutual funds through SIP.


If you like this article, you may also read

• SIP in Mutual Funds is the best
• Rupee Cost Averaging takes you to become a Crorepati
• Dont Trade but Invest for Simple reasons

Why do you need a good financial planner

What is financial planning as a concept?

Financial Planning in simple words means planning your finances in such a way that you are able to invest your income in the right direction and thus create long term wealth and managing your finances in a way which helps you to meet financial goals like Child education, daughter marriage and retirement planning.

When do you need a financial plan?

A lot of people think that there are just in late 20’s or early 30’s, why do they need to think about future which is going to come after 15-20 years. Well, planning for finances in advance also helps in creating wealth and meeting long term financial goals. So the best time to review your financial plan is today

Why do you need a financial Planner

You need a financial planner because of the following reasons

1. Updated with all financial products

Every person is the master oh his trade, and so is financial planner who will assess your requirement and suggest you the best suitable financial product to you. Spending money on buying insurance or mutual funds doesn’t help you in meeting long term financial goals, but along with it, proper planning is required. You need a financial planner who will analyse your risk profie, your current income and finally fit you the best term plan or mutual fund or fixed deposit as per your need.

2. High Level of Service

Financial Planning is not a one day process. It is more of a continuous process where your financial planner would monitor your investments every year and make changes to your portfolio which the change in the economic conditions in India and changing debt markets scenario. As he is getting paid to render you quality service, he is likely to do well as compared to so called mutual fund agents or insurance agents.

3. Understands your complex financials

A good financial planner would analyse a lot of things and understand your financial goals before asking you to invest somewhere. Like

·         Your current take home salary

·         Your savings scenario

·         Your monthly expenditure

·         Your current fixed assets

·         Your future goals

·         Your insurance requirement

·         Your contingency plan

After asking and analysing all the above points, he will design a picture in his mind and design a financial plan for you and your family needs

4. His Experience would be of good use to you

The financial planner must have dealt with a lot of people with different situations. As a experienced financial planner, he must have seen the ups and downs of the equity and debt markets. He would guide you to a conclusion where you are benefited with high returns in a long run

Do leave your valueable comments if you feel in favour or against the concept