As I have made periodic forecasts on stock market movements during the last one year or so and some of my views were also carried by local dailies, please match my views with the recent upward movements of banks' stocks and mutual funds (MF). I also observed that although the stock market in Bangladesh has the potential for the DSE index to rise around 5,500 by the year end, it is likely that the index will touch 5,000 and Tuesday the market crossed the point and closed around 5020.
I am a small investor, but a long-term investor holding on to fundamentally good stocks for years. I enjoy more of a market fall than a price rise in stocks which allows me to inject the dividend I earned and other idle cash into undervalued fair priced stocks. And I do invest as much money as I can afford to lose as all investments in stock markets are subject to market risks. But throughout the world, stocks have out performed all other investments over the longer term. The 1st to 8th mutual funds of ICB outperformed all other investments in Bangladesh too over a period of 20 years and more.
I have a portfolio of about 12 stocks comprising bank and mutual funds (MF) stocks and all these have been rising slowly during this month and today all my holdings have outperformed others in the market both in terms of number of shares traded and all my MF holding today touched the circuit breaker. I sold 10 per cent of my holdings on Tuesday for hefty profit and positioned myself to inject the sale proceeds into another available fair priced stock/MF. During this month my investment portfolio has risen by about 40 per cent.
Years from 2009 to 2012 were bad one for investors. But over a period of 10 years or so, it was possible to ride out the loss if invested prudently without any margin loan.
Stock markets are always subject to market risks due to political problems and poor economic indicators. Bangladesh is now experiencing a stable political environment with many positive economic indicators and it should be a welcome environment for local and foreign investors. But much depends on our regulators' moves against manipulators and speculators.
Luthfe Ali
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