[padmrajravi]

The problem is that there is no guarantee that existing projects will carry on. When the revenue stream gets hit, all the major players will decrease their IT spend for continuous development. Only the maintenence activity will carry on. At any point of time,a legacy client , say a retailer, will be spending money on continuously developing new features to their application as well as maintaining their existing features. The moment revenues fall for them, they will stop all development, releasing development engineers and focus only on running the existing features. This has already started happening.

[joslicx]

Originally Posted by SmartCat

What's the worst case scenario? Let's assume that INFY/TCS is unable to make "new sales" for atleast a year (because Covid-19 is raging across Europe and US). What could the revenue impact on Infy be?

In other words, in a typical IT company, what percentage of revenues come from legacy projects and what percentage comes from new projects, in a year?

Well, the business world is going to be badly affected, at least for several quarters to several years. Airlines, banks, mega businesses like oil, travel, etc everything is going to be affected badly. Some of them will go bankrupt. It remains to be seen how badly some of Infy's customers would get impacted. Maybe some of them will go bankrupt. This also means job losses and more protectionism.

Testing times. I think Infy revenues could see degrowth for some quarters. That should impact dividends as well.

[adimicra]

Like most of all, I am sitting on significant losses in my portfolio which mainly costs of mutual funds and a few bluechip stocks. Since I have not sold already, I don't think there is any point in selling now when the markets are already 35% down. I see the worst case fall to 6K in the Nifty and my guess is it will take a good 2-3 years to recover from this crisis.

I think the immediate short term point is look for flattening of the curve worldwide, Govt stimulus measures etc. In the medium term, if we get a vaccine or some medicine approved, it will lead to a sustained recovery.

[Sawyer]

I am in a similar boat, diversified between debt, equity and FD. I see the sale thing a little differently - fortunately not being in need for the money in the near term, so there is no hurry to incur a loss by selling. And if the market does a deep dive from here, even the debt/FD will start assuming risk, so sell and invest where in any case? Physical Gold is not practical, and in any case, one can't eat it.

Instead, I am now considering encashing some debt and investing in equity. I just have to pluck up some courage and do some research.

[JLS]

Originally Posted by Sawyer

I am in a similar boat, diversified between debt, equity and FD. I see the sale thing a little differently - fortunately not being in need for the money in the near term, so there is no hurry to incur a loss by selling. And if the market does a deep dive from here, even the debt/FD will start assuming risk, so sell and invest where in any case? Physical Gold is not practical, and in any case, one can't eat it.

Instead, I am now considering encashing some debt and investing in equity. I just have to pluck up some courage and do some research.

Point is when to enter the market. Now or wait for further dip?
Some stocks seem quite mouthwatering, but will they correct more or they have reached bottom?
Any insight?
Also, please share results of your research, what stocks you find interesting in current scenario

Thanks
JLS

[alpha1]

Originally Posted by JLS

Point is when to enter the market. Now or wait for further dip?
Some stocks seem quite mouthwatering, but will they correct more or they have reached bottom?
Any insight?
Also, please share results of your research, what stocks you find interesting in current scenario

Thanks
JLS

If one knew the answer to that question, he would never need to work ever.
You cannot time the market. Just have faith while plunging your savings in the hope that stock market will rise just like it has in the past. Don't wait to fish for the bottom - because you can never predict its time as well as its price.

But to give you a flip side just check the Nikkei (Japanese stock market index) Dec 26th 1989 onward: https://www.macrotrends.net/2593/nik...cal-chart-data

It has never recovered to it's past glory!

[whitewing]

Originally Posted by adimicra

Like most of all, I am sitting on significant losses in my portfolio which mainly costs of mutual funds and a few bluechip stocks. Since I have not sold already, I don't think there is any point in selling now ...

Originally Posted by Sawyer

I am in a similar boat,...
Instead, I am now considering encashing some debt and investing in equity. I just have to pluck up some courage and do some research.

I recently read (may be on this forum itself, can't quite recollect) an interesting strategy of booking the losses and adjusting it for future capital gains for our Income tax returns. It sounded to be a strategy (potentially) reducing tax outflow.

A couple of the long term investments I made have fallen considerably (ranging between 30%-50% loss), so I sold them and bought them back.
This has meant that
- I will now be able to book losses under the capital gains and adjust it against any profit made (I'm hopeful of that).
- Since I was able to buy the stocks at a cheaper price, I ended up accidentally reducing my losses.

Additionally the portfolio "looks" better, since the stocks that were "recycled" were the ones pushing my holdings to deep red. Although net net every thing remains same , more a psychology thing I guess.

[carboy]

Originally Posted by whitewing

I recently read (may be on this forum itself, can't quite recollect) an interesting strategy of booking the losses and adjusting it for future capital gains for our Income tax returns. It sounded to be a strategy (potentially) reducing tax outflow.

There is also another strategy which one can do every year for tax savings.
(not for current situation).

Every year, book profits of at least 1 Lakh in long term capital gains. Even if you were planning to keep that profitable stock for longer, just sell it & buy it back & book capital gains. This will reduce your capitals gain in future years.
This is because upto one lakh in LTCG is exempt from tax.

For e.g. if you have stock A - you bought 1000 units for 200 Rs each - currently the price is 300 Rs. So even if you want to keep it, instead sell it at 300 & buy it back at 300 (you may not be able to execute the exact figures this way - you may lose a small amount or gain a small amount, but it would be less than what you save).

Now your LTCG is 1 Lakh which is tax free. However, after a few years when the stock reaches Rs 500 and you actually want to sell it, your LTCG on the stock would be 2 Lakhs instead of 3 lakhs if hadn't sold it in between.

This can be done with a combination of stocks/mutual funds etc upto LTCG of 1 lakh in total each year.

[sdp1975]

What's a good NIFTY ETF to buy ? ICICI prudential was a good one when I last researched several years ago - it had the lowest expense ratio. Any other options now ?

[carboy]

Originally Posted by sdp1975

What's a good NIFTY ETF to buy ? ICICI prudential was a good one when I last researched several years ago - it had the lowest expense ratio. Any other options now ?

Most of them have 0.10% Expense Ratio. So go by the volume.

http://passivefunds.in/indian-etfs-index-funds-data/

Nippon Nifty ETF & Icici Nifty ETF are the 2 biggest ones.

[civic-sense]

Half of my assets were invested in stocks (mostly IT) and MFs. The Coronavirus wiped out a third of that in the last 1 month. I don't know whether it is worth holding on to them knowing that the Coronavirus situation is only going to get worse - actually, much much worse. Should I just sell off and salvage whatever is left? Is there any hope in the horizon?

[sudev]

Originally Posted by civic-sense

Half of my assets were invested in stocks (mostly IT) and MFs. The Coronavirus wiped out a third of that in the last 1 month. I don't know whether it is worth holding on to them knowing that the Coronavirus situation is only going to get worse - actually, much much worse. Should I just sell off and salvage whatever is left? Is there any hope in the horizon?

Unless urgent cash is needed stay invested. You may recover your value but IMHO you will definitely recover more.

[SmartCat]

Originally Posted by civic-sense

Half of my assets were invested in stocks (mostly IT) and MFs. The Coronavirus wiped out a third of that in the last 1 month. I don't know whether it is worth holding on to them knowing that the Coronavirus situation is only going to get worse - actually, much much worse. Should I just sell off and salvage whatever is left? Is there any hope in the horizon?

I suppose the other half of your liquid assets are in debt funds or fixed deposits? If yes, then you are fine. Do nothing. But if you are uncomfortable with your current equity holdings, then lower your exposure by booking profits in your profitable stock (and/or MF) investments. Another option is to stop SIPs. But no point in booking losses.

90% of IT companies have zero stress (meaning debt) on balance sheet. They can navigate choppy waters well. If the pandemic continues to devastate world economies, IT employees might be in trouble - but not IT companies per se. But yeah, the stock value could tank - but is likely to recover when the world economy recovers.

Markets don't like uncertainty. That's why the huge 35% crash. But if there is positive (from market PoV) news like trillion dollar stimulus packages, universal basic income etc, some uncertainty about short term future goes away. Stock markets try to look beyond the current headlines (Eg: rising infection & death statistics).

[Maibaa]

Originally Posted by SmartCat

I suppose the other half of your liquid assets are in debt funds or fixed deposits? If yes, then you are fine. Do nothing. But if you are uncomfortable with your current equity holdings, then lower your exposure by booking profits in your profitable stock (and/or MF) investments. Another option is to stop SIPs. But no point in booking losses.

If booking losses is not advisable, then what is the point of stopping SIPs? This is a good time to stay invested and continue with SIPs due to the low cost of units during this time. Any way have to wait for the markets to rise to realize profits. So would realize more from SIPs invested at this time.

[SmartCat]

Originally Posted by Maibaa

If booking losses is not advisable, then what is the point of stopping SIPs? This is a good time to stay invested and continue with SIPs due to the low cost of units during this time. Any way have to wait for the markets to rise to realize profits. So would realize more from SIPs invested at this time.

Continuing SIPs or buying stocks during bear market is conventional wisdom, and that is mostly based on looking at past statistical data. It is NOT based on psychology or frame of mind of individual investors.

Car analogy: If your friend says he is uncomfortable driving at 80 kmph speeds on an expressway because road ahead looks a bit foggy, you will NOT ask him to keep the pace because the car will get to the destination faster. You will NOT ask him to keep the pace because you know the road is safe. Instead, you will ask him to take it easy and slow down a bit to more comfortable pace, say 60 kmph. Ditto with equity investing. It is not some kind of race where you have to get the best possible theoretical returns. You are competing with nobody.

My unconventional investment advice is: Continue/Increase the SIPs in MFs or new stock investments if you are comfortable/excited about the bear market. But if you are not comfortable with the evolving situation, stop the SIPs in MFs or book profits in stocks.