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Many investors on the street are talking about ‘election Bull Run’. Many analysts and reporters are talking about how Indian Equity market reacts to General elections of the country.

Many bloggers are also trying to fill the gap of analysis and draw a probability tree of what will happen to the economy if any political part or alliance comes into the power.

Every human beings knowingly and unknowingly predict what will happen but does not understand that world does not works on those predictions. Look around you, try to pull out five year old news on internet or read in the newspapers and see if they have come true. It is a win-win situation in prophecy business. If their predictions fail there is no monetary losses they incur.

Here are the few examples, click here, here and here and you will be surprised to know what happened in reality. Election results should not bother the long term investors as long as they know where and in what quality assets their money is invested. Five years back, the same ruling alliance was considered as best for our future economics.

There are three scenarios and any one can be a reality. Either the market will rise, fall or will go nowhere. The same three scenarios can happen to my or your stock portfolio. Let me take an example of one of mine stock from portfolio, Mindtree. My average purchase price for Mindtree is Rs 675 and today it is trading at Rs 1600. If market jumps 20% before election and Mindtree shares too and start trading at Rs 1920, what will I do? Again, I have three options, either I will sell, buy or hold.

Assume market falls 20% and same happens to Mindtree stock price. They fall from Rs 1600 to Rs 1280. I again have three options, either I will buy more, sell them or hold them.

As a value and professional investor I have my business plan with me for each of the scenarios ready. As a part owner of this business I know what is the value of business and also the potential of what returns to expect from it. If I think Rs 2000 is a good price to get today for this business then I won’t sell it even at Rs 1920. Same thing if it drops back to Rs 1280 and if I think that price is cheap I won’t hesitate to buy more.

The focus and all of your energy should not be on who will win the election but on what will you do if market rises and how will you capitalise if it falls.

The results of election will definitely impact the overall macro economy of the country, but it will be a very slow change and investors will get enough time to make any changes if required in their portfolio. There will be a short term glitch but long term investors should not worry about them.

Are you ready with your investment plan if market throws the opportunity and falls 10% or 15% in the future or an uptick of the same level and throw insane price? We have our investment plan ready every day and gets altered everyday if required.