Wednesday, February 25, 2015

Why the Budget day, should not be over exaggerated


It is the budget month. The stage is all set for the finance ministry to roll out the most awaited document, which will ascertain the economic condition of the country in the coming time.
Budget, historically is known to influence the markets. As the announcements are made in the parliament, the Sensex is known to dance in full swing and the breaths of many are held because of this movement.
Relying on the budgets to ascertain the market position and feeling panic because of the impending budget may not be the right approach regarding budget. A budget is a presentation of financial position of the government and the country in general. The market moves in positives and negatives just because of the sentiment attached to it.
When someone is relying on a good budget or a bad budget to predict the performance of the market, it is just like a student, failing to research and prepare himself, now prays for an easier set of question paper so that he can sail through the examination.
Similarly, an analyst, who has failed to do his homework, rely on the positives of budget to make sure his investment strategy work out.
I do not say that the budget do not impact the market, but relying heavily on the budget is not a good way to make sure that your investment in equity will perform, or will fall down. No one can write off his analysis and fundamental homework while stock picking just to say in the end that budget was not good, so his investment strategy do not work out.
Market is surely influenced by sentiment, but everyone can sail through this phase if his homework on stocks is strong enough not to drown away in the tide called market sentiment.


Stay tuned to know what more this budget have in store for you…


Image Credits: http://goo.gl/bV7Xyz

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