MAKE MONEY NOT WEALTH & KEEP IT SIMPLE !

The sentiments in Indian stockmarkets over the last one year has made us ponder the strategy to be followed in bearish, broadly range bound markets with extremly poor investor sentiment and adverse news all around.

Scams,paralysed central govt,high inflation,detiorrating Indian macros,euro nations debt crisis & fears of a double dip in the U.S. are some of the reasons of the sharp bear market we are witnessing today which may result in broadly range bound markets for a longer time than we can imagine.(Index returns nearly zero for 4 year period).The downgrade in Indian earnings which started 4 quarters ago seems no signs of relenting with likely earnings growth over FY12-FY13 moderating to 8-10% giving us an EPS of approx Rs 1125 for FY 12 & Rs 1226 for FY13.

Given the current stressed economic conditions we expect Indian equities to trade between 12-14x forward earnings multiple giving us a broad range between 14712 & 17164 for the period where clarity would emerge whether inflation has been brought under control & most importantly improvement in local policy environment has taken place or not,consequently the headline markets continue to be rangebound having periodical spells of euphoria & despair.

The strategy of investment in the current scenario would be to invest in a basket of diversified mutual funds for creating wealth in the long term paring your return expectations to 12% p.a compounded returns over 10 year periods that to if you are lucky,to most Indian investors the above return expectation would be a dissappointment the reason why we at analyzeequity.com beleive that you allocate a part of your funds for investing in stocks from our stock ideas section to enhance overall returns thus create wealth via the mutual fund route & profit from expected range bound markets by stock pickings from our stock ideas section.