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…
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