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Saturday, September 12, 2009

Invest in low value stocks

Invest in low value stocks
This is a right time to invest money in low value stocks that have gone unnoticed by researchers. now investors should focus of that stocks which did not rise due to sector-related biases and lack of research. I believe that there are a few such stocks whose price have corrected recently, but have not participated in the market bounce due to sector-related research or a lack of focused research. our current strategy for the broader markets are to " buy on dips" fundamentally sound stocks with strong business proposition and leadership. these stocks have significantly under performed and make attractive opportunities in the current market. there are ample number of stocks available at a discount in sectors like Auto Ancillary, Consumer Discretionary, Infrastructure and Real Estate, which failed to participated in the recent market rally. i will invest in stocks or stocks priced low in respect to key parameters like earnings and cash flow among other factors. i will follow 'value investment strategy' to invest in such companies whose stocks are available at a discount, expecting the market to discover the error, the resulting buying will push up the prices to where it belongs. thereby helping the investors to gain. while the downside risk of such investment is low, the upside potential is high. according to the investment strategy of the fund, the stocks in term of key parameters like P\E ratio, should be available at a discount of at least 20% as compared to the respective average of the peer group, or industry. at the current juncture we believe that stocks that have underperformed can offer attractive opportunities. i believe that the large cap index is more than fairly valued at this juncture.

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