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FUTURE SRILANKAN MARKET… In the next decade Sri Lanka is going to be the most exciting country in the Asian continent. So many foreign funds around the world are ready to grab the opportunities in this small island. Money will flow in an incredible way. Then what will happen to the Colombo stock market? Surprise, I am sure your investment will grow up with a huge amount. First, money will inflow to blue chip companies and absorb the liquidity and within a very short period the fundamental values will take the share price very high. After that many blue chip companies must choose the share split method and give more liquidity to the market and at the same hand they will double or treble the shareholders wealth. Secondly the mid cap shares, will shoot up with fundamental values and equal to the market index and investors sentiment. Thirdly, penny stocks will reach over their par value and fundamental values because of market sentiment and the future expectation about any cash infusion, and company turn around. Many funds inflow to the CSE market means, our market capitalization have to have an increase. As a result, 1. The listed companies will choose share splits, right issues and warrants to build up their share quantity and capital. 2. Many foreign and local new companies can be listed in the CSE. Very soon CSE will have to introduce derivatives and option trading to the market. 3. Then our daily turnover must grow up over trillion rupees. 4. Sri Lankan investors and brokers will have to expect more monitoring and investor protection methods can be introduced by the regulators and in the future you have to get used to these kinds of regulations. Finally my messages for the small investor “don’t go to margin trading or credit trading in the future. Buy any stocks what you want in cash payment. Keep that for long term investment for another several years. Then you will get a very big return. But at the same time, if u want to trade with the market, use another trading account and play with the market following the technical’s. But don’t use your margin over 25-30%. If not, at any market correction time, you will loose what you gained and also your capital” If any inexperienced investor is trading with the bull market, like, if any person try to cross the highway which is dangerous. My best message for the new commerce how to learn stock trading is… 1. Use the paper trading method. How to do paper trading? Take a piece of paper and a pen and note down the shares which you hope to buy with the price and quantity. But don’t buy it in reality. Next if you hope to sell, note the quantity and price you hope to sell. But don’t sell it in reality. Then you are able to calculate your gain or loss. Please try to do this at least or a minimum of 3 months. And I am sure that you will get an experience. It’s better to maintain 3 paper trading portfolios. One for your own opinion, other for your investment advisors opinion and the other for market rumors. Then finally you can analyze what is the best for you. But don’t forget that market rumors are not 100% true. My main message for the new investors, if you want to make profits you have to learn and get experience on how to move the market up and down, and how you can survive with this sentiment game. Many news channels and news papers or any institution will invite to public that the market is so good, you can invest in the market now and so many things. But without learning and without understanding it’s very dangerous. Because the stock market movement up or down have so many reasons and so many funds circulating. They have so many targets. In this process small investors will be in a risk. Therefore it’s a must that you have to learn. “If you want to understand the market movements properly, don’t do it part time, make it apart of your life and live with it” Don’t forget, “numbers make you happy and numbers make you sad” Have a nice day! |
