Indian Stock Market Picture In 2015
Stock market offers both high risk and high reward. Stock market is highly volatile and changes every second. At first investors were afraid of investing in stock market because of the high risk but now the scenario has changed. More and more trading is being done and new investors are entering the market as they are provided with higher rate of return.
Brief overview of the year 2014:
The stock market performed very well in 2014 and investors procured high return towards their investments. Many individual mutual funds and stocks gave returns of up to 50 per cent and the broader portfolios like sensex was up by 25%. As the interest rates begun to decrease and inflation was under control debt-mutual funds also gave high returns by investing in bonds. The commodities market did not face any lows and market remained very stable the whole year.
The predictions of the 2015 had already started and higher returns were expected the stock market as a whole. There will be situations where there will be gains and losses, the performance of the entire year cannot be examined in that manner. An average has to be computed and overall scenario has to be analysed before commenting on the performance of the market.
People who invested in bonds yielded high returns than the normal rate on bank deposits. Due to the decrease in inflation the interest rates have decreased and are expected to decrease further by half a per cent in the coming future. The value bonds have an inverse relationship with the interest rates, so higher value is expected. Real estate sector of the country has witnessed sluggish behaviour and sharp falls have been observed in some areas. There have rampant delays and the projects are not running on a proper schedule. The prices in real estate sector have not been favourable and it is advisable to invest in other assets.
Attractive Valuations and risk involved:
It is has been observed that on December 12 Sensex was trading at PE ratio (price to earnings) of 18.5. The new government has also given as surety that every possible measure will be taken by them to facilitate economic development. The equity market has been maintaining a balance but it is highly volatile and the future performance cannot be predicted properly.
Keeping the large number of factors in mind investors should properly distribute their investments in different portfolios for better security.